The debate on Zestimate accuracy continues. Let’s be clear. Zillow revolutionized the home buying process by introducing the Zestimate, which the company calls a “starting point in determining a home’s value and is not an official appraisal.”
Many home buyers and sells forget the fact that the Zestimate is only an automated starting point for home valuation. Their valuation shouldn’t be expected to be the final answer. Zillow admits that there is a margin of error and states that the Zestimate has a median error rate of 7.9% over the entire U.S.
However, when it came to estimating the home value of Zillow’s very own CEO, Spencer Rascoff, the margin of error was a whopping 40%. The day after his home sold for $1.05M, the Zestimate proudly stated $1.75M.
That’s embarrassing. Check out the screenshot below.
The bottom line is that buyers, sellers, and homeowners do the proper research, which includes getting a comparative market analysis (CMA) from a real estate agent and getting an appraisal from a professional appraiser. Zillow recommends this too, which we can see in this example of how far a Zestimate can be from true market value.
For more on the Zestimate accuracy of Spencer Rascoff’s former home, read Inman’s article “Zillow CEO Spencer Rascoff sold home for much less than Zestimate”.
Challenged by Zestimate Accuracy?
Have you experienced challenges with Zillow’s Zestimate on your property? Leave me a comment of any positive or negative experiences below.