Zestimates-Wrong-Inaccurate

Zestimates – Why They are Not Helpful

Why a Home Buyer should never use them

What is a Zestimate?

Zestimate

(Pronounced ZEST-ti-met) – Information is straight from the Zillow Website

The Zestimate® home value is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal. The Zestimates are automatically computed daily based on millions of public and user-submitted data points.

Zestimates® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:

  • Getting a comparative market analysis (CMA) from a real estate agent
  • Getting an appraisal from a professional appraiser
  • Visiting the house (whenever possible)

Zillow also produces a Zestimate forecast, which is Zillow’s prediction of a home’s Zestimate one year from now, based on current home and market information. Learn more about the Zestimate forecast.

*For more information on Zestimates directly from Zillow, Click HERE

From: the Los Angeles Times
By: Kenneth R. Harney
Date: February 2015

When “CBS This Morning” co-host Norah O’Donnell asked the chief executive of Zillow recently about the accuracy of the website’s automated property value estimates — known as Zestimates — she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.

Shoppers, Sellers and Home Buyers routinely quote Zestimates to realty agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.

Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are “the bane of my existence.” Consumers often take Zestimates “as gospel,” said Tim Freund, an agent with Dilbeck Real Estate in Westlake Village. If either the buyer or the seller won’t budge off Zillow’s estimated value, he told me, “that will kill a deal.”

Back to the question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off? Zillow CEO Spencer Rascoff answered that they’re “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%.

Whoa. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. But here’s something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates.” This section provides helpful background information along with valuation error rates by state and county — some of which are stunners.

For example, in New York County — Manhattan — the median valuation error rate is 19.9%. In Brooklyn, it’s 12.9%. In Somerset County, Md., the rate is an astounding 42%. In some rural counties in California, error rates range as high as 26%. In San Francisco it’s 11.6%. With a median home value of $1,000,800 in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $116,093.

Some real estate agents have done their own studies of accuracy levels of Zillow in their local markets.

Last July, Robert Earl, an agent with Choice Homes Team in the Charlottesville, Va., area, examined selling prices and Zestimates of all 21 homes sold that month in the nearby community of Lake Monticello. On 17 sales Zillow overestimated values, including two houses that sold for 61% below the Zestimate.

In Carlsbad, Calif., Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP Codes. He found that Zestimates came in below the selling price 70% of the time, with disparities ranging as high as $70,000. In 25% of the sales, Zestimates were higher than the contract price. In 95% of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP Code, Dowler found that 100% of Zestimates were inaccurate and that disparities were as large as $190,000.

So what do you do now that you’ve got the scoop on Zestimate accuracy? Most important, take Rascoff’s advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — Experienced Agents and Appraisers.

Zestimates are hardly gospel — often far from it.

Call the Martin Real Estate Team of Lake Norman if you are interesting in Buying or Listing Your Home in the Cornelius, NC Real Estate area or other around Lake Norman…or even if you are looking for more information on Lake Norman Real Estate Values.

704-900-1619

Lake Norman Waterfront Homes for Sale

Lake Norman homes

Listings 1 - 20 of 931   next

100 Brownstone Drive -- 5 BR, 5.2 BA
Price: $2,750,000 (7435 sqft)
Subdivision: The Point
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Dom DeMatteo | MLS # 3259357 | Active
150 Heathland Lane -- 5 BR, 6.3 BA
Price: $2,475,000 (7613 sqft)
Subdivision: The Point
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Matt Rawlins | MLS # 3277902 | Active
125 Thurstons Way -- 4 BR, 4.2 BA
Price: $2,100,000 (4675 sqft)
Subdivision: The Point
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Matt Rawlins | MLS # 3254651 | Active
8025 Shore Drive -- 5 BR, 5.3 BA
Price: $1,650,000 (6501 sqft)
Subdivision: Lakeshore
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Linda Cantelmi | MLS # 3279461 | Active
5008 Slanting Bridge Road -- 4 BR, 4.1 BA
Price: $1,340,350 (4561 sqft)
Subdivision: Pearl Springs Village
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Julie Joseph | MLS # 3224226 | Active
153 Fox Hunt Drive -- 4 BR, 5.1 BA
Price: $1,129,000 (6543 sqft)
Subdivision: Beacon Pointe
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Michael Toste | MLS # 3189656 | Active
4676 Sierra View Drive -- 6 BR, 5 BA
Price: $1,100,000 (5379 sqft)
Subdivision: Sailview
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Debra Beam | MLS # 3166931 | Active
156 Wades Way -- 4 BR, 3.2 BA
Price: $1,050,000 (4607 sqft)
Subdivision: Shady Grove
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Michael Toste | MLS # 3290417 | Active
2343 Crofte Drive -- 4 BR, 4.1 BA
Price: $939,000 (5108 sqft)
Subdivision: Northview Harbour
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Michael Toste | MLS # 3290662 | Active
217 Whippoorwill Road -- 3 BR, 2.1 BA
Price: $900,000 (2568 sqft)
Subdivision: None
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Zach Francis | MLS # 3292630 | Active
165 Pin Oak Lane -- 5 BR, 3.1 BA
Price: $870,000 (4137 sqft)
Subdivision: Oak Harbor
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Geri Silliman | MLS # 3267721 | Active
7565 Woods Cove Court -- 3 BR, 4 BA
Price: $854,900 (4472 sqft)
Subdivision: Woods Cove
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Michael Toste | MLS # 3267055 | Active
16108 Terry Lane -- 4 BR, 3.1 BA
Price: $850,000 (2508 sqft)
Subdivision: None
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John Rhodes | MLS # 3275752 | Active
128 Bunker Way -- 4 BR, 3.1 BA
Price: $849,900 (4770 sqft)
Subdivision: The Point
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Dom DeMatteo | MLS # 3279953 | Active
108 Wynward Lane -- 4 BR, 2.1 BA
Price: $849,000 (2678 sqft)
Subdivision: North Shore
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Patty Register | MLS # 3293022 | Active
147 Castle Drive -- 4 BR, 4.2 BA
Price: $829,000 (4681 sqft)
Subdivision: Indian Forest
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Colleen Hunt | MLS # 3259570 | Active
135 Ballston Drive -- 4 BR, 4.2 BA
Price: $825,000 (4389 sqft)
Subdivision: The Point
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Jeannie Coyer | MLS # 3287379 | Active
1224 Astoria Parkway -- 4 BR, 4.1 BA
Price: $799,900 (4681 sqft)
Subdivision: Astoria
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Michael Toste | MLS # 3293777 | Active
227 Hideaway Lane -- 4 BR, 3.1 BA
Price: $799,000 (5094 sqft)
Subdivision: None
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Zach Francis | MLS # 3145883 | Active
161 Castles Gate Drive -- 4 BR, 2.1 BA
Price: $775,000 (2416 sqft)
Subdivision: Morrison Cove
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Kenneth Poindexter | MLS # 3280692 | Active

Listings 1 - 20 of 931   next

Lake Norman Waterfront Condos for Sale

Lake Norman condos

Listings 1 - 20 of 38   next

637 Williamson Road -- 3 BR, 2 BA
Price: $359,900 (1820 sqft)
Complex: Harbor Point Village
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John Rhodes | MLS # 3292577 | Active
18816 Nautical Drive -- 3 BR, 2 BA
Price: $329,500 (1333 sqft)
Complex: Schooner Bay
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Debra Gallo | MLS # 3287515 | Active
103 Pier 33 Drive -- 3 BR, 2.1 BA
Price: $242,000 (1435 sqft)
Complex: Pier 33
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Karen Spruell | MLS # 3282462 | Active
17917 Ragtop Day Lane -- 3 BR, 2.1 BA
Price: $232,000 (1942 sqft)
Complex: Harborside Townhomes
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Doug Bean | MLS # 3292653 | Active
18821 Cloverstone Circle -- 3 BR, 2.1 BA
Price: $219,000 (1659 sqft)
Complex: Edinburgh Square
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Debra Gallo | MLS # 3285854 | Active
18319 Harborside Drive -- 4 BR, 3.1 BA
Price: $659,000 (2580 sqft)
Complex: Harborside
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Wilson Realty | MLS # 3259877 | Active
20009 North Cove Road -- 3 BR, 2.1 BA
Price: $355,000 (2285 sqft)
Complex: St Philip Square
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Keller Williams Lake | MLS # 3294764 | Active
18649 Vineyard Point Lane -- 3 BR, 2 BA
Price: $340,000 (1252 sqft)
Complex: The Moorings
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Keller Williams | MLS # 3254561 | Active
18840 Nautical Drive -- 3 BR, 2 BA
Price: $329,500 (1332 sqft)
Complex: Admirals Quarters
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Wilson Realty | MLS # 3286384 | Active
17810 Half Moon Lane -- 3 BR, 2 BA
Price: $325,000 (1436 sqft)
Complex: Half Moon Bay
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RE/MAX Metro Realty | MLS # 3294615 | Active
18701 Nautical Drive -- 3 BR, 2 BA
Price: $322,000 (1150 sqft)
Complex: Admirals Quarters
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Almost Home Carolina | MLS # 3288248 | Active
149 Portola Valley Drive -- 3 BR, 2.1 BA
Price: $279,800 (1935 sqft)
Complex: The Cove
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Schields and | MLS # 3274175 | Active
104 Burlingame Court -- 4 BR, 3.1 BA
Price: $275,000 (2480 sqft)
Complex: The Cove
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Fit Realty LLC | MLS # 3266111 | Active
115 Dellbrook Street -- 3 BR, 2.1 BA
Price: $249,900 (2036 sqft)
Complex: Morrison Plantation
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Nagy Properties | MLS # 3285411 | Active
19034 Natalie Michelle Lane -- 3 BR, 2.2 BA
Price: $247,500 (1849 sqft)
Complex: Lake Norman Cove at Jetton
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Golf Realty, Inc | MLS # 3266638 | Active
119 Capital Avenue -- 3 BR, 2.1 BA
Price: $233,900 (1966 sqft)
Complex: Morrison Plantation
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Keller Williams | MLS # 3283477 | Active
119 Capital Avenue -- 3 BR, 2.1 BA
Price: $233,900 (1966 sqft)
Complex: Morrison Plantation
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Keller Williams | MLS # 3283474 | Active
113 Capital Avenue -- 3 BR, 2.1 BA
Price: $231,900 (1966 sqft)
Complex: Morrison Plantation
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Keller Williams | MLS # 3264384 | Active
Gallery Drive -- 3 BR, 2.1 BA
Price: $229,900 (1663 sqft)
Complex: Westport Lakeside
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ElleBee Realty and | MLS # 3282228 | Active
Gallery Drive -- 3 BR, 2.1 BA
Price: $229,900 (1663 sqft)
Complex: Westport Lakeside
→ More info
ElleBee Realty and | MLS # 3282232 | Active

Listings 1 - 20 of 38   next