How Accurate is the Zillow Zestimate?

how much is my home worth, zillow zestimate, real estate market, selling my home

I am so excited to bring you a guest blog from a fellow Keller Williams, REALTOR this month.  His name is Darren Robertson and he is great with real estate and technology.  Please be sure and read his personal bio information along with his insightful article.  And, be sure and visit his website for even more fantastic articles.  And now…Darren, please take it away…

The Zillow Zestimate: How It Works

A lot of home sellers put a great deal of trust in the Zillow Zestimate, and this is understandable, given how influential Zillow has become in the online world of real estate. However, as you get ready to sell your home, it’s important to understand the Zestimate’s limitations in order to get a more realistic assessment of your home’s value.

When a competent real estate agent prepares an in-depth comparative market analysis, this report takes into consideration not only comparable sales in the area around your home, but also specific similarities and differences among the features of each property. The Zestimate, on the other hand, is based on a complex algorithm that can’t compare properties in this specific way. As a result, a nearby “comparable” sale the Zestimate picks out could be the ugly fixer-upper a few blocks over, or it could be the stunningly beautiful showpiece around the corner.

Real Estate Agents: Working For You

Good real estate agents know how to analyze differences between properties with regard to the level of upgrades and improvements the properties have, and they know how these differences affect the value of these properties. They are also familiar with the differences between local subdivisions, and they understand that sometimes, two subdivisions that are close to each other and have similar types of homes can have very different property values. This expertise is extremely important to a seller who is trying to get an accurate assessment of the value of their home.

Not too long ago, my wife and I sold a property in the Los Angeles area. On the day of our settlement, the Zillow Zestimate for our home was still more than $100,000 less than the closing sales price. Zillow’s algorithms couldn’t factor in that we had originally bought our home as a fixer-upper with a hopelessly outdated 1960’s kitchen and several different colors of dirty carpeting throughout. It couldn’t take into account all of the upgrades we had made to the property, including beautiful hand carved hardwood floors throughout the entire interior, a remodeled kitchen, new paint inside and out, and gorgeous landscaping. Zillow couldn’t have “understood” that our home was the only one in its price range in a small, highly desirable community surrounded by neighborhoods that were not as popular among buyers.

Perhaps most importantly, the Zestimate couldn’t take into account the fact that there wasn’t much uniformity among homes in our property’s neighborhood, and our three-bedroom home was one of only a few homes in the area that had fewer than four bedrooms. Because of this, our home was the only “entry level” home on the market in the area at the time, which represented a great opportunity for buyers who couldn’t normally afford a property in this neighborhood.

These kinds of factors make this neighborhood, as well as many others nationwide, particularly difficult to analyze unless you really know what you’re doing. Because our home’s neighborhood experienced such high demand and a low turnover rate, there weren’t many similar closed sales to compare our property to, so Zillow’s algorithm kept bringing up property sales from well over a mile away, apparently designating them as important “comparable sales.” The software had no way of knowing that these sales were much less relevant because they were in less desirable areas.

It takes a great real estate professional to understand all of the different factors that can affect the value of your property. The way you price your home can have a huge impact on whether or not you get top dollar on the sale of your home, so be sure to hire a real estate agent who has plenty of in-depth market knowledge!

About Darren

Darren Robertson discovered his passion for real estate after a less than stellar experience buying his first home. He loves real estate and Internet marketing almost as much as he loves strategy games and red wine. Darren can be found online at, or in person in Arlington, Virginia, the more down to earth side of the Washington D.C. area.

photo credit: House and Money on Scales via photopin (license)