Zillow is one of the most popular real estate databases
online and can be a good starting point for buyers beginning a home search or
sellers who want to see what similar houses in their neighborhood are selling
for. While the site is great for starting your search, beware of putting too
much faith in Zillow’s home value estimates known as “Zestimates”.
I’ve seen some Zestimates that accurately reflect the value
of a home, but I’ve also seen many that are way off. Zestimates are only as
good as the underlying public and user-submitted data that Zillow’s valuation
algorithm has to work with. The older or less frequently updated the data is,
the less accurate the Zestimate will be. For instance, if a home was recently
renovated, often Zillow won’t pick up on this. A complete kitchen makeover that
didn’t require a permit, and therefore, didn’t make its way into the town’s
public records is one example.
Zestimates are also less accurate in areas that have lower
housing turnover rates such as rural towns when people stay in their homes for longer
periods of time. Longer turnover rates are common in many parts of Vermont. Value
is often not attributed properly to differences in finish quality, mechanical
systems, and special features such as an owned solar system. Additionally, new
construction or pre-construction home offerings can often be significantly
undervalued by Zillow.
While Zestimates can be a good point of reference at times,
there is no substitute for the judgement and expertise of real estate
professionals such as appraisers and Realtors when you want to accurately know
a home’s value. I uniquely cover both of these professions as a certified appraiser
and licensed Realtor.