A few months ago, we wrote about Zillow right here, and we got such a huge response to that post, we realized that a lot of people have questions about Zillow and how exactly you can use it. This continues to be a topic that causes confusion, especially with homeowners trying to figure out what their homes are worth. As we mentioned then, Zillow is not a bad website...it's just not a great website for identifying the value of your home. Why not?
- Zillow relies on radius searches, rather than searching based on neighborhood and home similarity.
When you type your address into Zillow, it pulls up all the data of recent sales within a certain radius of your home. It doesn't know if your development is 20 years newer than the one next to it, or if you live next to a luxury gated community. It only bases the "zestimate" on recent numbers, regardless of neighborhood, which can cause a skewed value.
This is two different search areas for the same property-- on the left, a radius search that includes neighborhoods of higher end homes. This search would result in inflated values. On the right, a polygon search area specific to the neighborhood which would produce results of very similar homes and a much tighter value. - Zillow does not know what the condition of your home is. As you probably know, condition greatly affects value in an appraisal! Maybe you live in an older neighborhood where many of the homes have not yet been updated, but you have a remodeled kitchen and brand new hardwood floors. Zillow would probably guess low on your value, because it is using data for homes that are not as updated. Conversely, you might be hoping to refinance in order to do some big updates on your home-- if many homes in your area are updated, Zillow may give you an inflated estimate and unrealistic expectations.
- Zillow is primarily a lead generation platform for Realtors. If you've ever looked up your property
, you'll have seen three Realtors listed on the right of the photo. If you are looking for a Realtor, look on Zillow! They have the past performance of Realtors going back one year, so you can make an informed decision about who you want to work with. However, for value, talk to an experienced appraiser who can look at the whole picture by analyzing the market, accounting for condition and location, and do a thorough job in identifying the value of your home.
What is your experience with Zillow? Do you like using it for researching the market around your home, or for anything else? Let us know in the comments!
