6470 Mckee Way
4 beds 4 baths 3,186 sqft
Sold on 05/03/16
Should you believe the Zestimate?
Zillow has quickly become one of the most popular sites for home searches. Buyers use it to find listings and compare neighborhood prices. Sellers use it to get an idea what the price of their home should be. Is it an accurate way to find the value of a home?
Recently the CEO of Zillow sold his home for $1.05 million dollars. The Zestimate was for $1.75 million dollars on the day after the property was sold. How can Zillow be so far off?
We have our own example of Zestimates and selling prices. We recently sold a beautiful waterfront property for $566,500 on 5/3/16. The Zestimate for the property on 6/7/2016 is for $662,188. The property appraised for more than the sales price but no where close to the amount of the Zestimate.
So why is there such a large difference? On the home that we just sold, the owners had updated the kitchen and added an addition on the first floor which added a bedroom and bath. The remaining bathrooms in the home had not been updated. When buyers viewed the home, they gave us feedback that the home needed to be updated.
A Zestimate is an estimated market value and not an appraisal. Zillow uses public information as well as information from users (home owners) to come up with a Zestimate. In many cases, the interior of the home does not match the expectations. It may either be much nicer or in need of repairs and improvements.
The best way to determine the value of a home is to have a real estate agent do a CMA, Comparative Market Analysis, or get an appraisal from a licensed appraiser. In the end, the price of the home is ultimately determined by what a buyer is willing to pay.