Recently, Zillow and their Zestimate have been in the news because of a homeowner taking issue with how the Zestimate has negatively affected her home sale.
This homeowner paid $626,000 for the home six years ago and tried to sell it for a similar price. The Zillow Zestimate valued the property at $564,000.
The argument by the homeowner (which hasn’t quite gone to court yet) is that Zillow is acting as if they are an appraiser in this situation. Zillow is adamant that the Zestimate is just an estimate, but they had an average error rate of about 6% in 2016. That can get pretty significant in higher price points.
The Zestimate is meant to be just a starting point for buyers, but many look at it as more of an appraisal, which is not how it intended to be. This homeowner isn’t seeking damages, but rather just to get Zillow out of the appraisal side of things.
If you want to know what your home is worth, you can use a website like Zillow or you can hire a licensed appraiser, and there is an argument to be made for both. A licensed appraiser will take a more analytical approach by accounting for price per square foot and make adjustments for amenities.However, many times, the appraiser hasn’t actually seen the homes they compare yours to when coming up with a value. They don’t know if the home had a strong odor, backed up to power lines, or sat on the market for a long time, for instance.
An appraiser doesn’t have their finger on the pulse of the active market like a real estate agent who has been in the majority of homes that you’re comparing it to.
If you have any questions about finding your home’s value or you want to know what it’s worth, we’d love to help you out. Just give me a call or send me an email soon.