Zillow continues to be one of the most popular ways homeowners decide what their home is worth.
In fact, if you type into Google “What is my home worth?”, the top non-advertisement search result is Zillow.
The problem is that Zillow’s founder/CEO himself says that you shouldn’t use Zillow as a substitute for an appraisal or a market evaluation by a real estate professional. When I wrote about Zillow in the past, Zillow’s CEO Spencer Rascoff sought me out to comment that Zillow’s Zestimate is not an appraisal.
Zillow encourages homeowners to use real estate professionals for local market knowledge when evaluating value.
Zillow’s Jay Thompson summed it up:
For a computer-based algorithm that can’t see the inside of a home, can’t smell the dairy farm down the road and doesn’t know that the neighbors across the street have painted their house purple with polka dots, that’s remarkably accurate.
But it’s not accurate enough to determine what price to set for a home about to go on the market, or what price to offer on a home. The Zestimate isn’t intended to be used like that.
So don’t use it like that.
The Zestimate is a tool — a tool designed to provide a starting point in home valuation, a tool to track trends over time. The Zestimate is not a Zappraisal, it’s not a Zprice. It’s a Zestimate. You wouldn’t use a screwdriver to hammer a nail, would you? So don’t use the Zestimate tool in a way it wasn’t intended to be used.
How Accurate is Zillow for St. Louis?
Take a look at St. Louis.
Only 1 star. According to Zillow, a 1 star rating means that they are using the local tax assessor information or they are unable to determine a Zestimate.
Still, 1.1 million St. Louis metro homes are listed on Zillow with a Zestimate…and homeowners assume it is accurate.
If you click on Missouri, you’ll see not a single county has more than a 1 star rating.
So to answer the question “How to use Zillow to Determine the Value of your Home?”…you can’t.
At least not in Missouri.
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