A Look at Zillow’s Home Valuation Tool
Have you ever wanted to know how much your home is worth? Zillow® has an answer for that…or do they? Their online tool, the Zestimate®, uses a specialized algorithm to estimate your house’s value in seconds – but just how reliable are these estimates?
To find out what goes into determining this number, let’s explore the purpose of a Zestimate®, its accuracy compared to other methods, and ultimately help determine whether or not it can give you the most accurate valuation of your home.
What Is a Zestimate®?
A Zestimate® is an algorithm-based estimate of what your home is worth. It takes into account many factors like square footage, location, and recent sales prices in the surrounding area. That being said, it should never be considered as a guarantee of the exact market value of your property. Instead, it should be used as an educated starting point when considering your home’s potential value.
Factors that Can Impact Accuracy
The accuracy of any given Zestimate® will depend on many variables including how up-to-date the data used to calculate it is, whether all relevant information about the property has been taken into account, and whether or not any improvements or other changes have been made since its last valuation.
Additionally, if there isn’t much activity going on in your neighborhood or local market then this can also affect accuracy as well.
Making It More Accurate
If you want to get a better understanding of your property’s real market value, there are several things you can do to make sure that your Zestimate® results are more accurate and reflective of reality.
For example, updating the information available on your listing such as pictures and details about any updates or renovations that have been made can help improve accuracy significantly.
Additionally, including relevant information such as school district boundaries or nearby attractions can also help increase accuracy since these are important considerations for potential buyers looking in the area.
But this will only help you to a certain degree.
According to the Zillow® website, of the off-market properties in the Raleigh metropolitan area, only 46.22% of the Zestimates® are within 5% of the actual sales price. This could really throw you off base if you are calculating a home sale!
Zero In On The True Value
When you want to find out how much your home is worth, the most accurate method is to hire a Home Appraiser. A Home Appraiser is a real estate professional who has been trained and certified to determine the fair market value of houses. They use current market information of comparable homes in the area to create a report that details an appraised value.
With this appraisal value, you can make better decisions when it comes to selling or refinancing your home. But home appraisal costs start around $500 in the Wake County area, and fees can exceed $1,500 for larger or more complex properties.
Most real estate transactions will involve an appraisal, and it is usually paid for by the Buyer. I would only recommend it before listing a home if it is truly a unique property for which there are limited comparables.
Is There Another Option?
If you’re thinking about selling your home, a more affordable option would be to ask a local Realtor® to give you a Comparative Market Analysis (CMA).
Accurately assessing the value of a home is no easy task. In fact, it is a science. That’s why it is important to find someone who really knows the local real estate market!
A Comparative Market Analysis provides an invaluable resource to provide guidance on fair market value since it evaluates recently sold properties that are equivalent or similar – helping agents determine what price tag best fits their clients’ residences.
When selling a home, one must consider more than just the basics. Location is certainly important but you also need to factor in things like age, condition, features, and lot size – to name only a few. In addition to these elements of the property, local economics can also weigh heavily on residential real estate values.
The CMA will give you a good idea of what your home is worth in the current market. Click here to get your complimentary CMA from MORE Real Estate.
To Sum It All Up
All in all, while it’s important to remember that Zillow’s estimates should never be taken as gospel when it comes to assessing the true market value of your property; they can still be helpful starting points when trying to get an idea of your home’s value.
A home appraisal, while costly, will give a much more accurate assessment of your home’s value.
But a Comparative Market Analysis performed by a Realtor® who uses their expertise and knowledge of the local market will guide you in determining the estimated market value of your home. This information can then be used to help you set the right price when listing your home for sale.
Do You Need a Comparative Market Analysis?
Looking to sell your home? A CMA is the perfect tool for finding out what price tag it deserves. This market analysis helps you compare recent sales of similar properties in your area and gives you a better idea of how much potential buyers may be willing to pay.
With a CMA in hand, you can feel confident knowing that you’ve set a fair asking price when listing your house on the market – giving you one less thing to worry about during what can already be a stressful process!
If you would like to receive a Comparative Market Analysis of your home, at MORE Real Estate today. We would love to help guide you through every step of selling your property so that you get top dollar for it! We look forward to hearing from you soon.
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