2 months ago I wrote an article comparing Zillow’s Zestimate program to a regular appraisal process. It’s a common question that comes up and with the real estate market skyrocketing, thought I’d answer the question once and for all. To my dismay, I didn’t expect the large disparity which recently led to the end of Zillows flipping scheme.
The article describes “Zillow Group’s AI-power house flipping operation as a dismal failure”. It’s difficult to disagree with this characterization based on the data in this blog post. The irony is, it seems Zillow did not take their own advice about the accuracy of their Zestimate and it’s costing them greatly.
Zillow Zestimate Appraisal Accuracy
The Zestimate’s accuracy depends on location and the availability of data in an area. Some areas have more detailed home information available — such as square footage and number of bedrooms or bathrooms — and other areas do not. The more data available, the more accurate the Zestimate value will be.
The Zestimate is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.”
From my earlier blog on how accurate is a Zestimate vs a Home Appraisal? I compared Zillow’s Zestimate against our appraisals and the data suggested that Zillow’s Zestimate was not accurate 67% of the time.
Here are some of the discussion highlights from the previous blog post:
Paul T. a Chicago area broker says “yet another reason to use an appraiser!”.
John T. a Chicago area investor says “The next question I’d ask is how many homeowners grossly overpaid because they got into a bidding war with an algorithm?
Adopt Zillow’s do as I say, not do as I policy and hire Chicagoland Appraisals a professional appraisal company.
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Thanks for reading,