Zillow is one of the most widely used websites for finding out home values and other information. However, as anyone who has ever tried it knows, Zillow’s accuracy can be a little unreliable at times. We want to talk about some of the factors that make up a home’s value and how in some situations Zillow may be accurate while in others they are way off on their estimates.
We’ll also go over what you can do if you suspect your property value is too low or high according to Zillow.
#1) Inaccurate basic information.
The majority of the data at Zillow is collecting from public records.
But there have been a few instances where incorrect information was unintentionally inputted into the system resulting in homes being wrongfully valued.
An example of this is when one of Zillow’s data providers accidentally entered an address for Paul Brown Stadium instead of Paul Brown College, and all properties near the stadium were incorrectly assigned to its property value region. This resulted in many homeowners seeing their values drop drastically overnight because they weren’t actually living close to where they thought they lived!
This can be corrected by emailing customer support if you know about any mistakes your home may have on it.”
A) The majority of the data at Zillow is collected from public records sourced mainly through third party companies
B) Other parts of data is coming from user-submitted
#2) Mistake in Key Figures.
If we already know that some of the data is wrong, how can we trust that our property value is accurate?
Zillow will always be a resource for us to use as one of many, but it’s important not to rely on it too much.
A) This information is from the comments section
B) Zillow has responded and explained this in their comment reply: “Any time there are mistakes with an address listed on Zestimate, we want homeowners who know about those mistakes to contact customer support so they can correct them.”
C) Here’s what you should do if your home appears incorrectly valued: email customer service at email@example.com
D) We’re going to send out another blog post soon discussing more details
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#3) Where are the upgrades?
It’s almost impossible for Zillow to know if your property has the upgrades that you’ve done.
We want to be able to point out the upgrades, but Zillow doesn’t allow for this information and only values homes as they are when listed.
This means that sometimes the value of your home is lower than it could actually be because we can’t add in all those improvements and renovations!
Zillow’s not perfect: there are always some discrepancies with what may or may not have been missed by their system (therefore causing inaccuracies).
If you notice a mistake on your property then please contact customer service so they can get right on correcting it. And remember- any time you see an inaccuracy like these, don’t just ignore them- let us know about them too!
Also, if your house doesn’t have any upgrades and needs a lot of work Zillow doesn’t know that, it has no clue what condition your house is actually in and how much it cost. Did you know that lumber is at all-time highs right now? Any idea what that does to an investor’s renovation budget?
#4) Housing turnover rate.
It all comes down to where you live.
In places like New York City, for example.
The national housing turnover rate is about 18%.
However, in NYC it’s much higher- at over 30% per year!
This means that buyers have more choices because there are so many houses available to them. And since they’re not dealing with a shortage of homes on the market, prices stay low and affordable. Living in an area where you don’t need to compete against other buyers can make all the difference when negotiating for your dream home.
#5) Updates to Zillows Algorithm.
Every time Zillow updates its algorithm, buyers are impacted. It’s important to understand how these updates can affect you and what that could mean for your home.
For example, in 2011 Zillow made changes to its system which resulted in homes being valued lower than they were before the update occurred- a drop of about 25%. This change had an impact on everyone from sellers who wanted more money for their house down to renters or potential homeowners looking at whether it was worth buying a specific property. If there is another major adjustment like this one- we’ll all feel it!
So while some people may want shorter lists with less information; others will be frustrated by not having access to accurate values as part of the process of getting preapproved for financing or who know what else.
#6) The Bottom Line
Zillow’s values are too inaccurate to be used as a measure of home value.
In conclusion, Zillow’s values are too inaccurate to be relied on when determining the value of your house or other property. Though in some cases it might have been close, there were also times where we saw that they way off in their estimates which is not helpful for anyone trying to get an idea of what something will sell for or how much they should pay if renting. Homeowners can’t rely on this tool and buyers need more information than just looking at estimated values from Zillow before making decisions about purchasing properties- after all, these numbers could leave you with sticker shock!
Also in major cities, home values are what we call “block by block” and comparative home values MUST be done within a certain distance or radius or the values are inaccurate. That’s why many appraisals don’t come back well because someone isn’t valuing the property correctly. In some cases, it’s the real estate agent other times it’s the appraiser.
At the end of the day, it doesn’t matter which one is wrong because the homeowner and buyer are both at risk when relying on those numbers.
We will talk about how Zillow can make mistakes in determining a home’s value, but just as important to note that there are many other factors to take into consideration when calculating these values- such issues such as comparable sales data, poor neighborhood conditions, or “block by block” pricing variations in major cities. We’ll also discuss why it may be best not to rely solely on this online tool for judging what something will sell for or how much they should pay if renting and we’ll introduce you to some of our alternatives like Redfin and HomeGain so readers know where else they might turn.
Homeowners need more information than just Zillow.
At Philly Home Investor we’ll take the time to do a full review and report of your property and comparative properties that sold in the area and come up with the best price for your home. If you’d like to hear what a CASH offer on your property would look like just give us a call anytime at 215-322-1648 or fill out our online form. We buy houses all over the greater Philadelphia region including: Bucks County, Delaware County, Montgomery County, Chester County, Berks County, New Jersey and now also expanding into the SW Florida region.