According to Zillow’s website: “The Zestimate® home valuation model is Zillow’s estimate of a home's market value. The Zestimate incorporates public and user-submitted data, taking into account home facts, location, and market conditions. It is not an appraisal and it should be used as a starting point.”
This is very important to note that The Zestimate is not used by banks or lenders to determine the property value for the mortgage. There is still a need for a licensed appraiser to know the actual value of the property.
Zillow Zestimate Property Values Estimation
Zillow Zestimate is a user-submission tool that includes MLS Data or Multiple Listing Services which is a database established by cooperating real estate brokers to contribute data about properties for sale. An MLS allows brokers to see one another's listings of properties up for sale to connect home buyers to sellers. Under this arrangement, both the listing and selling broker benefit by combining and sharing data, and by sharing commissions.
Realtor.com versus Zillow
A frequently asked question from buyers and realtors is which one is more accurate? Realtor.com or Zillow Zestimate? The main difference between Realtor.com and Zillow Zestimate is that Realtor.com uses several sources or 3rd parties to provide multiple home values while Zillow uses their own program to create their own Zestimate.
According to Realtor.com’s website: “Our home valuations come from independent, automated valuation model (AVM) providers, whose solutions are used by many financial institutions, insurance companies, and real estate agents. Each AVM provider applies a unique approach and methodology resulting in a range of values that consumers can use as a starting point for discussions with a real estate agent.”
These two - Zillow and Realtor.com, and even Redfin will have different values and estimation of the property value. These two use different methods and each website has its own disclaimer about using their tools as a starting point but should be followed up with a CMA and these 3 tools should never replace the appraisal of a licensed realtor or a licensed appraiser.
Realtor Accuracy on Property Values
Real estate agents who know a specific area or location will be closely familiar with similar sales. In many cases when a realtor prepares a CMA, they have been inside some or all of the comps or even represented the customers or dealers in the sales. That knowledge is far by far the most accurate than any data that a computer algorithm could use. A realtor’s estimate or a Comparative Market Analysis (CMA) is definitely the more accurate and the more detailed estimate. Human touch does not fail in this sense.
Best Home Evaluator
The best way to assess your home is to have a proper appraisal or a CMA. Some experts would even suggest that a CMA is superior to an appraisal for a couple of reasons.
An appraisal could cost as much as $500.
Appraisers are very skilled and prepare detailed reports, they don’t have the in-depth expertise of having worked with homebuyers to assess and make offers on homes.
Online valuation tools have improved so much from where it started. Ten years ago, online tools like Zestimates were very much more inaccurate compared to the data from them we have today. In the present time, they are a very useful tool but they should still only be used as a starting point. Always let an appraiser or a real estate agent who knows the local market support you in determining the value of your home before you buy or sell.
At Coldwell Banker, you can be sure that you are in good hands as Coldwell Banker’s Real Estate Agents have the local knowledge of the location of your choice. Find a Coldwell Banker Advantage Office Near You!