I have had a lot of people ask me about the accuracy of their Zestimate. (The Zestimate is what Zillow is guessing your home would sell for.) So I thought the best place to go to answer that question would be directly from the horse’s mouth. Zillow has a four star rating for how good its Zestimates are. Here is how those ratings break down:
4 Stars – Best Zestimate
3 Stars – Good Zestimate
2 Stars – Fair Zestimate
1 Star – Tax Assessor’s Value, or unable to compute Zestimate accuracy
So how does Zillow hold up around here? If you go here, you can download a chart that gives you a rating for every county that Zillow covers. Here is your cheat sheet for central Iowa:
Polk County – 1 star
Jasper County – 1 star
Dallas County – 3 star
Warren County – 2 star
Madison County – 1 star
Story County – 1 star
Marshall County – 1 star
For the majority of central Iowa, Zillow is either just copying the assessor’s value, or is unable to compute Zestimate accuracy. The very best that it can do is one Good and one Fair.
Now, when you put that into real numbers, you can see what that means to you. The economist John Wake started to run numbers based on Zillow’s information. (All of this data is of July of 2016.) Zillow reported the average sale of a home in the United States is $229,737. It also self reported that its median error is 6.1% different from the price. So that means that the median ERROR IS $14,000. Now, you also need to take into consideration that that means that half of the time the error is MORE THAN $14,000.
So what that means to you is that if you are using Zillow to guess your homes value, you are most likely over-pricing or under-pricing your home. If you over-price your home, then you get few to no showings, and no offers. If you under-price your home and have no idea what you are doing, then you are most likely leaving quite a bit of money on the table. All of this is to say that there are always shortcuts. If you want a professional realtor to take into consideration more than just going and looking at the assessor’s site, I have good news for you. When I look at a home’s value I am looking at past sales, current competition, absorption rates, condition, neighborhood, the micro market, the macro market, interest rates, and even more. Plus, that is just the first step in what hiring a professional can do for you. Think about negotiations, repairs, experience, understanding of the bumps that can come along, and understanding of your individual market. Think about this being one of the largest financial transactions in most people’s lives. I know that I would want a professional helping me. Let me be the professional realtor for you. You can contact me or call me directly at 515-639-0047.
~Ryan Lynch
