Zillow’s Zestimates are a bit of the rage. Clients ask me about it and I see people talk about it on social media. Many use the site and even check out homes’ Zestimates. I checked out my own to see how accurate the site is.

According to Zillow, I live in a NO bathroom house. The Zestimate on my home was $75,000 too low.  The second I saw the value of my home my heart started racing and I got frustrated. What's wrong here?

My Zestimate report has data, graphs, and comparable sales.  I noticed all kinds of errors on the report that I manually changed after claiming the listing. Once you do that you can edit.  I added 3 bathrooms. Zillow said my home had none. I also added an additional bedroom, a finished lower level, and corrected the year it was built.  There was no adjustment for amenities or upgrades in the report. Making these changes helped increase the price however it still was not accurate.  Still being frustrated, I viewed the comparable sales to my home.  One sale was in my neighborhood however not comparable in size, lot view, price, or upgrades.  Comparable Home 2 was 60 years older than my house and a split foyer. I live in a ranch. Comparable 3 was on 2 acres of land with outbuildings and 50 years older than my house.

 My point being, there were not ANY houses an Appraiser or Realtor would use to price my home.

 There are 3 major adjustments not considered in the AVM, Automated Value Model.

  1. Location and Lot Characteristics
  2. Upgrades and Home Updated
  3. Condition of the Home

An experienced Realtor will adjust for location based on list to sale price ratio, days on market, and school district the home is offered in.  A more obvious lot adjustment is a golf course view, wooded lot, water view or access, or acreage.  A tract home or high traffic street has the same value as the examples noted in a AVM.

The second adjustment not calculated in the AVM is home owner improvements.  Would you rather have harvest gold appliances or stainless steel?  Yellow counter tops or granite?  The finishing touches and updates in a home add value. A house with three layers of shingles does not have the same value as one layer of shingle.  Furnace, maintenance free siding, flooring, kitchen and bath upgrades are also hot tickets when buying.

The third adjustment not calculated is condition. I learned a long time ago everyone's version of clean is different.  A home buyer will pay a premium for a meticulously maintained and up to date home in lieu of one that has pets, smokers, or visible wear and tear.  I LOVE my dog, but someone with allergies may not want to buy my house.  Since selling your home is a beauty contest, condition does effect home pricing. 

The Automated Value Model may be a good quick reference of home value for mortgage lenders or give you a general look at home pricing, FREE.  When buying or selling a home however it is important to seek guidance from an experienced Realtor who is "in" the market on a daily basis.  I know that I have bathrooms in my house, however AVM says I don't.  While this example is obvious, several thousand dollars can be lost for not having accurate information.

I can provide a professional pricing analysis for your house.

Heather Morris

Broker Associate to Skogman Realty