Posted on December 7, 2023 (February 19, 2024) by Rob at 714Web
If you’re a homeowner considering selling, you’ve likely turned to sites like Zillow to get an estimate on your home’s value before listing it. However, you may be wondering— is the Zestimate accuracy typically higher or lower than an appraisal when I go to sell my house?
Getting an accurate home appraisal is key to having a smooth sale process. If the appraisal comes under your asking price, it could derail a potential deal. As an informed seller, understanding how Zestimates relate to appraisals gives you more confidence when setting that listing price.
Key Takeaways
- Zestimates provide reasonable nationwide home value estimates, but have a wider range of accuracy for individual properties.
- Unique home attributes and real-time market shifts get accounted for better in professional appraisals, making gaps between the two hard to predict.
- On average, Zillow Zestimates come in higher about half the time and lower the other half compared to appraisals.
- Consult a local real estate agent to understand how Zestimates currently relate to appraised values in your specific area before listing your home.
- Get a free home valuation report from a local real estate professional
How Accurate Are Zillow Zestimates?
Zillow uses a complex algorithm weighing various home data to provide Zestimate home values. According to Zillow, Zestimates are accurate nationwide to within 5% of actual market value about 81% of the time.
However, for an individual home, the accuracy range is wider—about 10% higher to lower than the eventual sales price. So your specific Zestimate could still miss the final appraised value by a bigger margin in either direction.
Zestimate Accuracy – Why Do Zestimates and Appraisals Differ?
There are a few reasons why your Zillow Zestimate accuracy may be wrong. It may come in higher or lower than a home appraisal:
- Zestimates are automated estimates, while appraisals involve detailed home inspections to determine value based on overall condition. As a result, things missed by the Zestimate algorithm can get accounted for in appraisals.
- Zillow relies heavily on past sales data in the neighborhood surrounding the home. But appraisers also factor in potential value trends, demand shifts, and even issues with the home itself not available in public data.
- Your home may have unique quirks the Zestimate can’t accurately gauge the impact of, or you may have made custom renovations an appraiser deems valuable. These can skew estimates one way or another.
So in general, appraisers make value judgments based on experience and finer home details that automated estimates alone can’t replicate.
Are Zillow Zestimates Usually Higher or Lower Than Appraisal Value?
Industry analysis has shown Zestimates, on average, to be higher than appraisal values around half of the time. For the other half, Zestimates come in lower than eventual appraised worth.
However, according to real estate analysts:
- In a hot, seller-friendly market, Zillow Zestimates are likelier to be lower than appraisal values. Demand drives rapid home price growth that outpaces Zestimates.
- In cooling markets where demand slows, Zestimates tend to overshoot appraisals since they rely heavily on past sales that reflect formerly hotter markets.
The overall Zestimate accuracy range depends greatly on your specific area and conditions. A local real estate agent can offer better insight on how Zestimates in your city or neighborhood currently compare to professional appraisals.
In the end, an appraisal remains the true test of your home’s market value at the time of sale. Rely more heavily on those figures when setting asking prices or evaluating purchase offers.
The bottom line is Zillow offers a useful starting gauge, but true appraised value determines what a buyer ultimately will pay. Arm yourself with perspective on their Zestimate accuracy differences before selling so you can price and negotiate confidently!
Can a Houston Realtor® Find My House Value?
As leading Houston real estate agents, Chris Schmidt is the best realtor in the Houston area. He has the market insights, data, and expertise to provide houseowners like you with an accurate assessment of your property’s current value.
Connecting with Your Home Sold Guaranteed Realty - Chris Schmidt Team ensures you receive:
– A customized Comparative Market Analysis pulling the latest comparable sales.
– Precise pricing recommendations based on current market conditions.
– Guidance on how to prepare your house to maximize marketability and achieve top dollar.
We’re here to provide the clarity and confidence you need to price your Houston house right. Call Chris Schmidt and the team at 713-322-5604 to discuss how much your house will sell for in today’s market. Get a free home valuation today!
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