Zillow Zestimates are a popular tool for homeowners and buyers to get an estimate of a home's market value. However, they are not always accurate and should not be used as a substitute for an appraisal. Here are some reasons why Zillow Zestimates may be off:
Zillow Zestimates rely on public, MLS and user-submitted data, which may be incomplete, outdated or incorrect. For example, Zillow may not have the latest information on home improvements, sales transactions or neighborhood changes.
Zillow Zestimates use a proprietary formula that takes into account home facts, location and market trends. However, this formula may not capture the unique features, condition and appeal of each home. Additionally, market trends may vary by area and time period, and Zillow may not have enough data to account for them.
Zillow Zestimates have different levels of accuracy depending on the availability of data in a home's area. Some areas have more detailed home information available, while others do not. The nationwide median error rate for the Zestimate for on-market homes is 2.4%, while the Zestimate for off-market homes has a median error rate of 7.49%.
Therefore, Zillow Zestimates should be taken with a grain of salt and not be relied upon for making important decisions about buying or selling a home. A professional appraiser can provide a more accurate and comprehensive valuation of a home based on a physical inspection and comparison with similar properties.