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Apr 20 2015 11510 1
I was working with a buyer a few weeks ago who cancelled the contract on a house he was purchasing because he became nervous that he was overpaying when Zillow's Zestimate of the property was far less than the purchase price. In this case the house was a foreclosure that had been purchased by an investor who completely remodeled the home with a new kitchen, baths, flooring paint and more. Did Zillow know what was done since the house sold 2 months ago? Did they send in a magic fairy at night to reevaluate the property? Not likely!
As a Realtor I work with more and more buyers and sellers who are using automatic value models like Zillow to determine the value of the property they are buying or selling. Many consumers believe that if the value is published online it must be correct, right?
I did some checking and found that Zillow publishes the accuracy of their data. For Florida the information can be found at http://www.zillow.com/howto/DataCoverageZestimateAccuracyFL.htm. Once there you can click on the county where the property is located to find the current data. Okaloosa County has 3 stars out of 4 for accuracy which sounds pretty good. Looking further at the numbers you will see that only 31.8% of the homes sold with 5% of their Zestimate, but for the majority of the homes the Zestimate accuracy was far less. 56.8% sold within 10% of the zestimate and 78.8 sold within 20% of their Zestimate.
A home owner might check Zillow and determine that their home is worth $300,000 but the actual market value is $15,000 more or less with the 5% margin of error but, more likely, The property is $30,000 t0 $60,000 more or less than the Zestimate. I would hate to be the homeowner who relied on this data and under valued their home and sold it far below market value!
Realtors, like appraisers, look at the most current sales in your neighborhood to determine what the home is worth. A professional will look at the subject property to see what other features and improvements in the home that would add value like the addition of a pool or a complete remodel and make the proper adjustments to the value. This is the only way to get an accurate assessment of the properties value. If you are thinking of buying or selling a property don't rely on Zillow, call a professional to get the best information possible before making a decision.
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