What is a Zestimate?
Just today I was in a class where we were discussing the different online resources for home buyers and sellers that are often perused prior to enlisting the help of a Realtor. You will find that several of these websites are not yet able to provide any sort of accurate information about Charlottesville whatsoever, but it is moving our way fast. I am going to try to explore a couple of these with readers, beginning today with Zillow.
Zillow.com (Home of the Zestimate); Zillow is a site that aggregates real estate data from several different real estate websites out there and attempts (among other things) to help you find the value of your home, by way of a “Zestimate.” Evidently there are some cities, even here in Virginia, where the Zestimates are at least within the ballpark of the actual market value of a home. Unfortunately we can’t really test this here in Charlottesville, as they have not gotten enough market data about our area to even attempt a Zestimate for many of the properties around here.
Zillow defines a Zestimate as follows;
The Zestimate (pronounced ZEST-ti-met, rhymes with estimate) 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 pulled from data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. Variations in price also occur because of negotiating factors, closing costs, and timing of closing. 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)
- Creating your own estimate using the My Estimator home valuation tool
The information that Zillow has about Charlottesville certainly seems to be lacking. Currently Zillow shows 767 active properties in the Charlottesville/Albemarle region. The Charlottesville MLS, however, shows 1154 active properties in the area, and this number would not include FSBO’s (For Sale By Owners), foreclosures, and any number of miscellaneous listings that could be out on the web. Also, for the 5 most recent sales I’ve had, I found that only one home was even able to be located on the Zillow map, none provided Zestimates, and even then the tax assessment for the one property it found was completely incorrect (about $20,000 below the current assessment but also completely random- not an old assessment or any number remotely related to the actual number.) For now, Zestimates are not accurate nor are they especially helpful to the Charlottesville area.
What Zillow IS able to do in most markets and will be able to do even in Charlottesville in the not-so-far-future is help consumers visualize other homes for sale in their area. Zillow has a “Make Me Sell” feature, which allows people to map their own home on the website and then tag it with a price that they would be willing to sell the home for in the off-chance someone might come along with an offer. This may be a fun feature, but due to the multiple sources of the information that can be loaded into the site and the speed with which even correct information will become outdated, Zillow’s credibility will probably be questionable for a while to come.
What Zillow will NEVER be able to do, even with every real estate aggregator they can get their hands on, is account for the hundreds of intangibles that every property boasts. Zillow will never be able to tell you about nightmare neighbors, heavy traffic noise, the beautiful interior decor, or the extremely noticeable scent of moisture in the basement. Even if it does eventually enter the Charlottesville market with force and accuracy, buyer beware.
Something to keep on your radar; will Zillow’s Zestimates create perceived values that will eventually infiltrate our market and what people are willing to buy and sell their homes for? After all, perception is reality and market value is just the agreed price that is reached amongst a buyer and a seller. If Zillow can alter perceptions of worth, we may see an alteration of market values of homes.
