Friday, May 31, 2019 / by Justin Critchfield
One of the most confusing questions in real estate is
How accurate is Zillow?
A lot of the times buyers and sellers are checking the Zestimate to figure whether it is accurate or not because it is very misleading at times.
It’s important to know that the Zestimate is calculated via a computer algorithm and the algorithm is based on public data from what the state provides as public record. They can get things like your square footage and the number of beds and baths. But all of the sales that happen are not recorded into Zillow. In fact, if you are in a non-disclosure state, like Utah, the state as a whole doesn’t disclose the sale price. It’s much harder for Zillow to Zestimate Utah than it is for other states.
The accuracy of Zillow is important. According to Zillow's own stats, they say that nationwide, and again Utah is different, about 52% of the homes are within 5% of their actual value. That is pretty decent for an algorithm but when we are talking about a $300,000 home, 5% is a lot of money. That’s $20,000 to $25,000.
Remember 48% of the homes aren’t even within the 5% so you’ve only got about a 50% chance to be within a 5% margin of your home nationwide.
73% of the time Zillow is within 10% of the value. Not too bad but there’s an astounding 27% that is not even within 10% of the value.
Only 80% of the homes are within 20% of the value.
When you get to Utah you’ll notice, according to Zillow’s website, they have ranked how accurate they are as maintained by the state. You can see here that Utah is on a one-star rating. That one-star rating on accuracy goes four stars at best, three at a good, two to fair and one to tax accessor’s value or unable to compute Zestimate accuracy. They are not able to compute very much and Utah is the least accurate because it’s a non-disclosure state.
So to answer the question: ‘How accurate is Zillow?’
Zillow’s not very accurate. It can be but there are a ton of variants out there. For any of you guys thinking about buying or selling there are some options for you.
You can contact Read Deal Utah and get a free estimate on what your home is worth. It’s going to be much more accurate and pinpoint. We’ll do actual comparables, break it down in an appraisal style format and give you adjustments and credits to make sure that we are accurate on your pricing.
You should be crystal clear on how important it is to price your property right. If you go too high you absolutely can hurt yourself and lose money. If you go too low you can absolutely hurt yourself and lose money.
You can get this report which comes in all sorts of great details for you guys and will help you.
Get your no-obligation, free estimate today.