Is Your Zillow Zestimate Wrong?
How far off is your Zestimate? Zillow's estimate on your home's value.
Not only Zillow does this, but nearly every website will give you one nowadays. They're all different, and they're all wrong.
I'll explain what I mean by wrong... But first, let's explain what a Zestimate is.
This comes up in every conversation we have with people looking to sell their home. Many people feel confident when looking at their Zillow estimate that it's giving them the true value of their home even though it is an estimate.
This is straight from Zillow's website on their Zestimate. "A Zestimate is not an official appraisal, but is a starting point in determining a home's value."
You can also look at other websites like realtor.com, Trulia, and Redfin, and they will all give estimates. All the estimates will be different.
Here is where I explain where they're wrong. Let me share a random example:
123 Main St, Ladera Ranch (if this is your address, I am sorry. But here is your example)
The following are the home value estimates from several different well-known websites:
- Zillow = $1,215,200
- Redfin = $1,046,012
- Realtor.com = Couldn't find the address somehow
- Trulia = $1215,200 (Zillow owns Trulia)
If you owned this home and priced it off your estimate, depending on which website you looked at, it could cost you $150,000.
Zillow says it very well: the estimate is a starting point. The reality is that they don't know anything about your home outside of public records. They how many bedrooms, bathrooms, and square footage the home has. Assuming that is all correct, they don't know if your home is made of gold or burnt to the ground.
If you're looking for a starting point on your home's value, check the estimates on 2-3 websites to get a rough idea.
The reality is that there is not a single number to "value" a home. I always share with our clients that there are three different prices for any home.
1. What an appraiser will say it's worth. The truth is, if you hired 10 appraisers to appraise your home, they would give you 10 different numbers.
Quick story... We sold a home in Laguna Beach that had three separate appraisals on it.
- First appraisal came in at $1.9m
- Second appraisal came in at $2.25m
- Third appraisal came in at $2.65m
How is it possible that three different professionals could value a property at a 30% difference? Good question. I have no idea. This story is to give my brief experience and opinion of an appraisal. Sorry if you are an appraiser reading this.
2. Fair market value for a home. This is not a number, but it's a reasonable range. This is how we always share the value of a home.
The reason for this is we will give options for upgrades or repairs that could be done that would improve the value of the home.
Here is a simple example:
A home that is painted white inside will sell more than if that same home were painted black. This is an exaggerated example, yet it is very true.
3. Whatever a buyer is willing to pay
This is the reality of the 'value' of the home. You can make a large impact on what you would sell for (value) by making minor changes. Does this impact the value of the home, or is it just affecting the selling price?
I'll share another example along these lines. If your neighbor painted their entire home pink before you sold your home, it would likely affect your home's value. Same if they had music blasting every time you had a potential buyer looking at the house.
All these things affect the value of the home. So, if you're looking for a rough starting point, these estimates are fine.
Here is how we give estimates here at Onyx Homes. Like most things in our business, we give our clients options.
You can go to our website and add your address. Once you fill out the basic information, you'll get a rough estimate of the value of your home.
Then, we will go in and run a market analysis on your home and dial in the home's value. We update these ourselves, and we do it consistently to keep you updated.
* The more information you provide us, the more accurate this analysis will be *
This is our version of a "starting point." You won't need to talk to anyone, and you'll get the first estimate immediately.
Go to our website or call us at (949) 649-4902. Your local expert will go through a quick phone (or email) interview to get more information on your home.
The questions we ask sound like:
- When was the last home renovation
- When was the kitchen done? What does it look like?
- When was the Master done? What does it look like now?
- Do you have any issues we should know about
Have us come out to your home to do a free market analysis and staging consultation. This will allow us to get the most possible information on the home. We will also be able to go through the home and show what repairs or upgrades you could do vs. the ones that you shouldn't.
This appointment takes between 20 minutes to an hour, depending on how many questions you ask. At the end, you'll walk away knowing exactly what to do to your home to get the most out of it.
You don't need to be ready to sell your home to take advantage of this option. Actually, it's better you do this at least a year ahead of time. That way, you can be ready when you are ready to sell.
There's no cost or obligation when you go with any of the three options.
Here is a reminder of the links and what they do