The old saying in real estate sales is “your home is worth what someone is willing to buy it for.” This suggests that there are many different factors, some arbitrary that go into the valuing of a home.
Zillow has become on the national name brands in real estate, but the questions is, “Should I Trust Zillow to Determine My House Value in Memphis?”
No.
Don’t trust Zillow for valuing your home. Here’s why.
Is Zillow Estimate Accurate to Determine My House Value in Memphis
When you’re looking to sell your home, it’s perfectly natural to not know how much your home should sell for. You remember what you bought it for, and you feel like its value should have increased over time, but you’re not sure exactly how much.
A natural place to turn when you’re looking to know how much to list your home for is Zillow, partially because you might use the site to research your next home and because the site has a wealth of information on it.
Yet, you might wonder how accurate the site is when it comes to your area. Take some of the below factors into consideration when you’re looking at Zillow estimates.
The Number of Homes Sold
As Zillow is creating the estimate, you’ll want to look at how many homes have been sold in your area. If Zillow doesn’t have a very large sample size to choose from, then it’ll be more difficult for the estimate to be accurate.
How Recently Homes Have Sold
The more current the home listings are, the more helpful Zillow’s estimate will be. You’ll want to be able to look at several home sales in the last few months. If there are only a couple of home sales, and they’ve taken place over several years, then the listing is less likely to be accurate.
How Similar Are the Other Homes to Yours?
Another factor that you’ll want to consider is if the other homes are similar in size, age, renovation, land amount, and location to yours. If the other homes that have sold recently aren’t like yours, then the Zillow estimate won’t be as relevant to you.
With all of that being said, although Zillow is a great resource to use, make sure that it is not the only thing you rely on when determining the value of your home. You may want to have an appraiser come look at your house to see how much it is truly worth so that you know how much you should sell it for.
How Does Zillow Create Estimates
Zillow calls its proprietary estimating tool a “Zestimate.” Even with all the pricing factors placed into the formula, there is still a high margin of error because Zillow isn’t actually looking at your home.
The proprietary formula looks at the market pricing in the area. It will factor in the size of the house, the lot and all features of the home including the number of bedrooms, bathrooms, pools and highlighted features. However, even Zillow will say this is a starting point for a true va\luation of your home and should not be considered an appraisal or true value.
The reason is the information Zillow uses is reliant on accessing public records and user input such as realtor sales. However, Zillow cannot discern if your home is the dilapidated eyesore in the community or the completely redone and upgraded home everyone is envious of.
Additionally, Zillow doesn’t discern community pockets. These are very common in larger cities where you can have higher end community just blocks from a mid or lower-end one. These “pockets” can skew or be skewed by larger metro data that Zillow factors in that aren’t pertinent.
The More Accurate Model
Any professional realtor will tell you that pricing a home to sell requires a full understanding of the home itself, the location and current market trends in that area. In fact, most realtors look at Zillow pricing with a bit of disdain because it does make pricing and managing realistic client expectation more difficult.