One of the first questions I get asked when people find out I am a Realtor is "Zillow says my house is worth $______ (fill in the blank) - do you think they are right?"
And the first thing I would tell anyone is that - Zillow is not a person, it is a company! And yes, they will give you a value for your house (called a Zestimate), but no - it is probably not right!
Of course, there are lots of other sites out there (Realtor.com, Redfin - to name a couple others) who will also provide you with a value for your home! But just how accurate are these sites, and why would there be differences between what the sites say your home is worth and what a Realtor would say it is worth, and finally, what the market says it is worth!
First, you need to understand just how they came up with their valuation of your home! You need to understand what Zillow (and Realtor.com and Redfin) DID NOT do ---
They did not come into your home and see the total kitchen renovation you just completed!
They do not know that the 1400 SF shown in the tax records is incorrect and that your home is really 1800 SF!
They do not know that the county is widening the road behind you, which will increase the traffic count coming by your house each day AND that the county may be taking part of your backyard!
They don't know that the roof on your house is on it's last leg and needs to be replaced sooner rather than later!
So how does Zillow and Redfin and Realtor.com come up with the valuations for your home? Each of these sites have algorithms to come up with the value using public data. The public data is normally the tax assessed value. They then take into consideration other data such as recent sales, etc. But if you have looked at your assessment recently, you know that sometimes that data can be way off from reality! And the algorithms choose comps based on who knows what! So that computer isn't going to know that the house next door that just sold was sold as is because it needed a lot of work and the price was held down because of that! It doesn't know that the neighborhood across the street from your neighborhood goes to a different school, so that may affect the pricing on the houses that sold across the street!
Should you completely abandon looking at things like a Zestimate? I think it could be a starting point, but only a starting point! Even Zillow says that their Zestimates are sometimes off - I looked at the Zillow website, and it shows that for the major metro areas (unfortunately Richmond was not on the list), their median error rate runs anywhere from 2% to almost 6%. So if I have a $500,000 house to sell and there is a 6% error rate, that means I could either end up pricing my house 6% too low (which means I may end up leaving as much as $30,000 on the table) or I could end up pricing my house 6% too low, which means that my house may end up sitting on the market longer than it should! Neither scenario is very good!
If you are thinking of buying or selling your home, feel free to look at these automated valuations that are online, but make sure you have a seasoned real estate pro do a thorough market analysis for you! A good Realtor will be able to show you what your home is truly worth - they know the neighborhoods and they will be able to use comps that truly are comparable to your home. After all, in this 2022 real estate market, no one wants to leave money on the table and no one wants to overprice their home where it ends up sitting on the market for a long long time!
If you want to know what your home is worth in today's real estate market, feel free to give me a call. I am happy to answer any questions for you!