How Accurate Are Zillow And Redfin Estimates?

Everyone loves looking up their home on Zillow or Redfin to see the estimates of their property’s value.  How accurate are these estimates?  These websites use algorithms based on recent sales of similar properties to calculate this value.  This is similar to the Kelly Blue Book that lists an estimated value for your car based on: year, body style, and options.  The Blue Book value can be fairly accurate.  But, it is impossible for it to take into consideration factors like: rust, salvage title due to accident damage, pet stains, cigarette odor, vandalism, etc.  The Blue Book value is a great starting point but you have to further refine the price.

Similarly, think of the price estimates on Zillow or Redfin like a price estimate to get you started.  Each property is going to be different.  Even if you have two homes with the same floorplan, they will be different because they are built on different lots.  One home may be at the front of a neighborhood near the busy entrance while another home may be tucked away in a quiet culdesac.

Once a home is a few years old, the differences become even more noticeable.  Some homes get upgraded with valuable features like air conditioning, blinds, hardwood flooring, sprinkler system, or a water feature.  And, overall condition is very important.  Some families are really hard on homes.  After just a few years, their home will need some TLC.

Anyway, use the home price estimates on Zillow or Redfin as a rough starting point to help you estimate a property’s value.  Your real estate agent can do further investigating to fine tune this value for you.  I am a car guy so I put a car spin on this topic.  When searching for a car, you get to be an expert at what is a ripoff versus what is a fair price for a certain year and model car with certain options.  You have visibility on everything that is available in your area.  You know which cars sell versus which ones aren’t selling and need a price reduction.  A similar phenomenon happens with real estate.