When talking to people about the value of their homes, we often hear, “well Zillow says…”. Actually, we hear this ALL the time. People can’t help it… Zillow is a great resource to check out properties on the market and the interface is extremely user-friendly, but how reliable is that Zestimate?
Many people just type in their address, see that Zestimate $ number, and trust that the internet gods must know what’s up. Some people may even ponder to themselves, “hmm I wonder how they came up with that number?” 🤔, but never researched. I’m here to tell you that there is a whole page on Zillow dedicated to the Zestimate and what it all means.
Check out these snippets from their site (below). I’ve marked the highlights where Zillow states that it uses a “computed proprietary formula… is a starting point….encourage to supplement….get a comparative market analysis (CMA) from a REAL ESTATE AGENT”. 
^^^^^^^^^ My favorite line is above, “…the Zestimate is a good starting point…but it should not be used for pricing a home”. One more time for good measure… “SHOULD NOT be used for pricing”. This is coming out of their mouths folks! But let’s take a deeper dive. The reason that your Zestimate is just a starting number is that Zillow uses an algorithm that only accounts for basic specs that are listed on the public record (numbers of beds, baths, sq ft, lot size, etc). Any upgrades and remodels are not in these records, and cannot be systematically gathered and verified by Zillow so they are not used in the calculation.
Does this make sense? Zillow guesses the value of your house without knowing the quality of finishes or workmanship. Your house could be built by a famous architect,have an insane view, or some other spectacular detail that Zillow has no way of assigning a value to…and they will just compare it to any other similarly sized house in the neighborhood. Likewise, let’s say you inherited a hermits house that hasn’t been revamped since 1973, that was smoked in and left to decay. Zillow’s algorithm has no way to know or recalculate, so again it bases its value on the other similarly sizes houses on the block….that happen to all be recently built in a luxury subdivision within the last two years. Doesn’t seem like a fair comparison, right? (I’m planning on a great follow up blog on this, just wait…)
So now maybe it makes sense why these Zestimate values are off. But now you are thinking, “well Zillow is a BIG company with LOTS of money and they use a smart computer and an algorithm thingy so how wrong could the numbers possibly be??” Well, of course, I’m here to break that down for you too! Zillow is nice enough to provide the public with accuracy tables. Below, is the chart for Massachusetts. 
In Mass, only 55.0% of homes actually sell within 5% of that Zestimate value. This means reversely that 45% are off by MORE THAN 5%!! I know 5% seems like a small amount, but let’s do the math to give it perspective. (To make my life easy we will use round numbers 😛). Say a home is given a Zestimate of $500,000…is listed for the same amount, hits the market and eventually sells for $475,000… exactly 5% less than the asking price. Part of this is a matter of perspective on how much you consider to be a lot of money, but having to sell my house for $25,000 LESS than I was expecting to is HUGELY DISAPPOINTING. Reading further down the chart it shows that 90.3% sell within 20% of the Zestimate value, meaning 8.7% DON’T. Using the same property as the example… 20% difference on a $500,000 is a whopping $100,000. Statistics of this Zestimate number being accurate are not very good.
Maybe you are thinking, “Mass is small in size but varies greatly from cities to rural areas. That must be why the numbers are off by so much.” Well (un)fortunately Zillow gets more in-depth and analyzes its info down to counties and major metro areas. Below I’ve circled the counties where we sell the most, as well as Boston specifically.
You can see, Zillow is pretty consistent in their inaccuracies. Using the better case scenario, only 49.2% – 55.6% of homes actually sell within 5% of the given Zestimate. Not great odds in my opinion.
Now this comedic chart above is an exaggeration, but a funny way to show that maybe we should stop putting so much faith in the internet gods. Just because it’s in black and white print on the world wide web does not make it true…
If you made it to the bottom of this long info blog, congrats! You are now smarter and ready to wow your friends with some #truth. Because you know at some party or family affair, there is always that one person #humblebragging about their house saying, “Well Zillow saiiiiid……” *smack*. Hit em with the truth bomb and remember you learned it here first! #ScanlonRealEstateTeam is always here to make you the best & brightest consumer/seller possible.
Much love lovely people ✌️ – Alana
Scanlon Sells Homes 
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