If you own a home, or know people who own a home (OK, so everyone), you’ve probably gone online to check your Zestimate on Zillow. Or maybe you get those email updates from Zillow or Redfin.
It feels pretty good, right? These days, you’re probably seeing regular, healthy increases to that estimated sale price. But guess what? It’s probably about as accurate as what you’ll find in the average fortune cookie.
While it is true that Zillow and Redfin and the rest (Realtor.com, etc.) have nice algorithms that calculate the value of your home, those estimates often disagree. Sometimes they vary quite widely, and that can make a huge difference when it’s time to sell. Why?
If I Had a Dollar for Every Time I Heard That…
As any real estate professional how they feel hearing a seller utter the phrase: “But Zillow/Redfin says my house is worth $X!!! We are listing too low!” I dare you.
You will most likely see a massive eye roll, followed by groaning and muttering.
Zillow Can’t Smell Cat Pee
Algorithms take into account square footage and how much neighboring properties have sold for. There’s other secret sauce in there also. I realize there’s more to the equation.
But the almighty algorithm still can’t smell. Or see for itself. How does the Zestimate know what people see, smell, and touch in a home? How can it tell if the sellers were heavy smokers, or had a menagerie of pets in the house? You guessed it: it doesn’t.
The Feels
There are all kinds of data points that go into how we assign a home’s value. That’s where your friendly real estate professional comes in. Those of us who have been around the block a few times learn what buyers notice, like, dislike, and feel.
There are some properties that give you the warm fuzzies, and some that feel cold. Or aloof. Or sad. These are things that can’t be estimated.
Your Fortune
For entertainment purposes, check Zillow. Sure. Sign up for those Redfin estimates. Check up on your neighbors’ house, too. But for the love, if you are thinking of selling your home, don’t tell me what Zillow says it’s worth.
Let’s look at comparable properties together and have a conversation. Online valuations will be part of the equation. But take it with a grain of salt, and not as gospel truth. Also keep in mind these valuations change!
Though your Zestimate may change by a sizable chunk from one day to the next, that definitely does not mean your home is now worth $50,000 more or less than it was yesterday.
A home’s true worth is what one buyer is willing to pay for it at one moment in time. Not what the algorithm says it’s worth.