Earnings Disclaimer: Please note that Hearst Magazines and Yahoo may receive a commission or revenue from certain products or services linked on this page. Zillow enthusiasts and real estate aficionados are no strangers to the Zestimate feature on the online marketplace. Displayed just below the primary listing price, Zillow generates over 160 million Zestimates for homes throughout the United States and Canada. While referencing the Zestimate can provide insights into the listed price’s accuracy, many wonder about the methodology behind these estimated values.
If you’re curious about the data informing these estimates, their precision, and the potential for homeowner influence, keep reading.
What exactly is a Zestimate?
A Zestimate represents Zillow’s proprietary home valuation tool. Utilizing an algorithm, Zillow calculates an estimate of a property’s market value using a blend of data from public property records, tax records, recent local home sales, and user-provided information.
What factors contribute to your Zestimate?
Similar to an appraisal, the Zestimate considers key home attributes like square footage, location, and the number of bedrooms and bathrooms. Homeowners have the ability to claim their property on Zillow and update details to ensure accuracy. The Zestimate also incorporates on-market data, such as listing price, property description, and days on the market, as well as off-market data sourced from public tax assessments and past sales.
Market dynamics play a role in Zestimate accuracy.
How precise are Zestimates?
While no home value estimate is flawless, Zestimates are as accurate as the data supporting them. Zillow reports a median error rate of 2.4 percent for on-market homes and 7.49 percent for off-market properties. Accuracy can vary by location, with regions having varying levels of accessible home data. Inaccuracies may arise from errors in critical data points, like incorrect sale prices in comparable home records.
Enhancements to a property, such as a kitchen renovation or additional bedroom, can impact a home’s value but may not be immediately reflected in Zillow’s estimate. Homeowners should notify their local property tax authority of such upgrades to ensure accurate valuation. Staying informed and updating relevant records can contribute to a more precise Zestimate.
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