Zillow Estimates
Don’t get me wrong; Zillow.com is a fun tool and very helpful, but… it has its limitations.
I strongly advise you not to take the Zillow value very seriously, but rely much more heavily on the opinion of an appraiser or real estate professional.
Why?
First, Zillow uses a mixture of public data and user inputed data to run its calculations of value. It only takes a couple of errors in public data to give some very odd errors in a Zillow valuation.
Here’s an example, let’s say a house sold for $200,000 that, according to public records, had 1,000 finished square feet on the main floor of their house. What public records did not know was the the sellers, without telling the city, finished 1,000 square feet of their basement. Now, the home really has 2,000 square feet of living space and the buyer, who actually went inside and saw this, was willing to pay $200,000 for this house.
Now, imagine Zillow is trying to determine the price of a second house that, according to public records looks identical to the one we just discussed except on this one the public records are correct that only 1,000 square feet are finished. Guess what? To oversimplify, Zillow may think that is is worth $200,000 too because it looks like the exact same house that just sold for $200,000 when it has HALF as much finished square footage.
Secondly, a good real estate agent/broker or appraiser can give you information that Zillow just does not have access to because it is a computerized model. Can it tell you that a toxic waste dump is going to be built behind the houses across the street? No. Can it tell you that the city is about to change the zoning for a neighborhood? No. For these reasons, you need a knowledgeable professional to help.
Now, I do admit that Zillow is working very hard to overcome some of these issues and their tool is a great resource and I am very grateful to have it, but just be careful about the data it gives you. Zillow’s information is not something to base your decisions on.