Many home sellers rely on online services to conduct their business these days. So, if you are gauging the current value of your home, there is a good chance you have checked its Zillow Zestimate at some point.
Before you make any decisions regarding the Zestimate you received, it is worth asking some important questions. For instance, how much should you trust that estimate? Does it accurately reflect the true value of your home at the moment?
Selling your home will be one of the most important transactions you will ever take part in. However, you must rely only on accurate data to make that decision. Find out if your property’s Zillow Zestimate is a reliable data point by continuing with the rest of this article.
What Is a Zillow Zestimate?
Learning your home’s true value is not always a convenient process. For example, you may need to pay someone to learn the value of your home, and they may not provide the information you need right away.
If you only want to kick the tires on the idea of selling your home, going through the conventional methods of determining property value may seem like too much work.
Zillow appeals to many home buyers and sellers because it gives them the information they need instantly. But do you want to know how much your home is worth? The mentioned website can give you a valuation.
The valuation they provide is known as a Zillow Zestimate. Zillow Zestimates produces its estimates by using the company’s proprietary formula.
As the name suggests, a Zestimate is still an estimate of your home’s worth. Zillow clearly states that it is not an appraisal, and you cannot use it in place of one.
Consider the Zestimate as a reference point. Treating it as anything more than that could be a risky move on your part.
How Are Zillow Zestimates Calculated?
Now that we know what Zillow Zestimates are, let’s take a closer look at how they are calculated.
Zillow keeps its formula close to the vest, so we do not know exactly how they are coming up with their valuations. However, we do know about the data they are using in their calculations.
In terms of public data, Zillow leans heavily on tax assessor and county records. They also utilize the information they gather from brokerages and multiple listing services. Finally, they use the direct feeds provided by those sources to get the most recent information available.
They also integrate seasonal market trends into their calculations. So if any homes sold recently in your neighborhood, you could expect Zillow to take note of those transactions too.
To get a more accurate read on a particular property’s value, Zillow will use on-market bits of data such as the description of your home and the valuations of similar properties in the area. They will also account for how long a home like yours stays on the market to produce a Zestimate.
Zillow will consider additional information, including the square footage of your home and its standout features, before they come up with their valuation.
We do not know if Zillow uses other pieces of information. However, we know that the data points are all considered when Zillow produces your home’s Zestimate.
How Accurate Are Zillow Zestimates?
Zillow Zestimates are handy if you want to get a ballpark figure for your home’s value, but how accurate are those numbers? Zillow does not claim their estimates are super accurate for what it is worth.
They note that the nationwide median error rate for their on-market home Zestimates is currently at 3.2%. Meanwhile, Zillow says that the nationwide median error rate for their off-market home Zestimates is 7.52%.
Let’s take a closer look at data relevant to New York State so you can make a more informed decision regarding your property there.
Zillow Zestimates Accuracy for On-Market Homes in New York State
If you are trying to sell your New York home, you should know that the median error rate for on-market home Zestimates in the state is currently 4.09%.
Zillow notes that 57.25% of their estimates for on-market homes in New York State are within 5% of the actual sales price. Maine is the only other state where Zillow was less accurate when providing estimates within 5% of the final sales price.
Lower the bar to within 10% of the sales price, and Zillow’s success rate goes up to 81.77%. Zillow also provided estimates for on-market New York homes that were within 20% of the sales price 96.38% of the time.
Zillow Zestimates Accuracy for Off-Market Homes in New York State
It should be no surprise that Zillow’s accuracy drops significantly when it comes to off-market data.
Their median error rate for off-market homes in New York State is 9.61%. That is more than twice their error rate for on-market homes in the Empire State.
Zillow only gets within 5% of the actual sales price for off-market homes in New York State 28.59% of the time. That is a low number, and it is hardly dependable if you are serious about selling.
Setting the threshold to within 10% of the sales price raises Zillow’s accuracy rate to 51.52%. They also get to within 20% of the actual sales price for off-market homes 77.17% of the time.
The numbers indicate that Zillow has difficulty coming up with accurate Zestimates for homes in New York State. The only other state where they seem to struggle more is Maine.
Given Zillow’s struggles to gauge the housing market in New York, you should avoid relying on them to come up with your numbers. Instead, offer that same advice to other people you know trying to sell their homes in the state.
What Is the Impact of Having an Inaccurate Zestimate Attached to Your Property?
It would be one thing if the inaccurate Zillow Zestimate attached to your property were only known to you. However, since Zillow offers information to the public, which is obviously not the case.
Inaccurate bits of information that are widely available to the public can be problematic. This section highlights why they could get in the way of you selling your home.
Disputes between Buyers and Sellers May Emerge
When a buyer makes you an offer with an incorrect Zillow estimate in mind, the number may be well below what you expect. Of course, you may attempt to correct their incorrect assessment of your property’s value, which may only worsen the dispute.
Resolving the matter may either involve abandoning the deal or getting a third party to mediate it.
Your Reputation as a Real Estate Investor May Suffer
While trying to sell your home in New York State, you may constantly encounter buyers using data they gathered from Zillow to present offers. As you continue to decline offers well below market value, some buyers may think you are taking advantage of them. They may think you are not basing your numbers on accurate data because they are far apart from what Zillow provided.
Your reputation as a real estate investor could suffer because of that. Buyers may think of you as someone who jacks up their prices without real reason, and they may decline to work with you moving forward.
You May Make a Bad Deal
Arguably the worst consequence of having an inaccurate Zestimate attached to your property is that you may make a bad deal.
If you do not know how inaccurate Zestimates can be, you may believe that the low number assigned to your property is correct. After someone presents you with an offer close to that number, you may agree to sell your property.
You may only find out later that you lost substantial profits. Prevent that from happening by using other resources alongside Zillow Zestimates. Also, consider working with reputable home buyers if you wish to get a good deal on your New York State property.
What Can You Do if Your Zillow Zestimate Is Inaccurate?
You cannot ignore the potentially negative effects of having an inaccurate Zillow estimate. As we discussed in the previous section, they can have genuine consequences when you decide to sell.
Thankfully, there are steps you can take to correct the inaccurate Zestimate.
Claim Your Home on Zillow
To correct the inaccurate estimate for your home on Zillow, you must first claim it.
The process of claiming a home on Zillow starts with you providing your home address. After typing your address, you must provide other information to claim the home. Those bits of information may include your name and phone number.
Disputing ownership of your property may be necessary if someone has claimed it before you.
Add Information About Your Property
Next, you can now add information about your property to create a more accurate Zestimate. Note any new additions that may not be in your Zillow listing. Aim to provide as many accurate details about the additions as you can so your Zestimate can better reflect the true value of your New York State property.
Correct Inaccurate Details About Your Property
Lastly, you may need to correct inaccurate details about your property if it has been listed on Zillow for a while. For example, some of the details about the number of available rooms may no longer be accurate, so go ahead and correct them.
The old Zestimate for your property may also be counting its issues before your remodeling project. Discuss the repairs you made since the last time you updated the listing so Zillow can produce a more accurate estimate next time.
Why Is the Zillow Zestimate Changing Without Any Input from You?
Once you have become aware of your property’s Zestimate, you may develop a habit of checking it regularly. While doing so, you may notice your property’s estimated value change from time to time.
The changes may catch you by surprise because you are not doing anything on your end.
Although they may be concerning the first time you see them, those changes are nothing to worry about. Zillow says that Zestimates change due to market trends and seasonal demand. Therefore, the listing for your property likely changed to reflect the current condition of the housing market in your area.
What Are the Other Ways to Determine a Property’s Value?
Until you have adjusted the Zillow Zestimate for your property, the number it displays may not be completely accurate. If you are looking to sell your home without depending on the Zestimate, you need to explore alternative methods to determine a fair list price.
Check out the options below if you want to get an accurate price point for your property.
Hire an Appraiser
Hiring an appraiser to evaluate your home can help you determine its value. Appraisers research housing data, examine market trends, and inspect houses to determine their unbiased valuations.
Make sure you work closely with an appraiser, so they have a good grasp of what your property offers. Take them through a guided tour of your property if you think that will help them with their evaluation.
Consult with a Real Estate Agent
Whether you are buying or selling your home, you will likely need to work with a real estate agent at some point. Consulting with one early on in the process is not a bad idea if you want to get some information regarding your property’s true value.
A realtor can also show you what prices are like for other homes in the area. You can then use that information to determine whether your home’s valuation is accurate.
Zillow Zestimates can adversely affect your plans to sell your home because they may convince buyers that you are asking for an unreasonably high price. If you wish to receive fair offers for your property, consider working with us at House Buyers LI. Reach out to us today and sell your home without any difficulties!