How Zillow Is Overestimating the Value of Your Home

This article comes as no surprise to any of us in the real estate business, but it may come as a surprise to some first time home buyers and maybe some of you reading this blog post. There have been a number of times throughout my real estate career where a buyer or seller client of mine used inaccurate home value information from Zillow to justify their offer price, if they're a buyer, or listing price if they are a seller. An appraisal is the most accurate in determine price, and the second most accurate, in my opinion, is a Comparable Market Analysis (CMA) that we Realtors routinely prepare for clients. 

According to the article, Zillow's "Zestimates" have a 8% median error rate across the country. So for a $500K homes, the price can be off by as much as $40K! Zillow CEO Spencer Rascoff even admits that his companies website is not supposed to be final say on a home's value, but rather a starting point.

How Zillow Is Overestimating the Value of Your Home