Date: 29/03/2024
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Zillow's 'Zestimates' and their inaccuracies.

Inaccurate Zillow 'Zestimates' a source of conflict over home prices

Home shoppers, sellers and buyers routinely quote Zestimates to realty agents as gauges of market value
Zillow CEO Spencer Rascoff says that nationwide Zestimates have a "median error rate" of about 8%

When "CBS This Morning" co-host Norah O'Donnell asked the chief executive of Zillow recently about the accuracy of the website's automated property value estimates - known as Zestimates - she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information - square footage, lot size, number of bedrooms and baths, photos, taxes - plus a Zestimate.

Shoppers, sellers and buyers routinely quote Zestimates to realty agents - and to one another - as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers' list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.

Back to the question posed by O'Donnell: Are Zestimates accurate? And if they're off the mark, how far off? Zillow CEO Spencer Rascoff answered that they're "a good starting point" but that nationwide Zestimates have a "median error rate" of about 8%.

Some real estate agents have done their own studies of accuracy levels of Zillow in their local markets.

Last July, Robert Earl, an agent with Choice Homes Team in the Charlottesville, Va., area, examined selling prices and Zestimates of all 21 homes sold that month in the nearby community of Lake Monticello. On 17 sales Zillow overestimated values, including two houses that sold for 61% below the Zestimate.

So what do you do now that you've got the scoop on Zestimate accuracy? Most important, take Rascoff's advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values - experienced agents and appraisers. Zestimates are hardly gospel - often far from it.

kenharney@earthlink.net

Distributed by Washington Post Writers Group.

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