Not very. Zillow’s own CEO sold his home for 40% less than his Zestimate claimed it was worth.
While Zillow does their best to create a formula that calculates the value of homes, Zillow misses some major factors that affect the price. Quality of home upkeep and renovations make a huge difference when calculating price. For example, if you’ve finished a basement, updated a kitchen, or built a shed, Zillow is unaware of these factors and how they can influence price.
The Zestimate algorithm also misses local factors. Annoyances such as road noise, train tracks, abandoned buildings or conveniences like parks or shopping close by, all affect price disproportionate to the Zestimate.
Zestimates are at heart based on the work real estate agents do to price houses. When an agent lists a property for sale on the MLS, Zillow changes their Zestimate based on the list price.
They have no regard for style factors like an open floor plan, quality photography or staging either. Each of which is proven to increase sale price.
Zestimates should be taken with a grain of salt. It can serve as an adequate starting point despite regularly being 5-10% or more off what a realtor’s expertise values a property at.
Know that when working with the Kris Jensen Team, we use our experience and local market expertise to properly price a house to sell quickly. And if you’re in the market to purchase a home, give our app a try.