As an Edison NJ real estate agent, one that has been in the business for 10 years, I can remember when Zillow and Zestimates were all the rage. Zillow launched in beta form back in 2006. Back then, real estate agents like me, thought Zillow revolutionized the way we evaluate property values.There was a time when a Zestimate, Zillow’s version of fair market value of a home, would be fairly accurate. . .but that time was short lived.The following blog post will highlight 10 reasons why you should NOT trust your Zestimate and in essence why Zillow fails to be accurate. I am not here to bash Zillow. There are plenty of angry homeowners who have voiced their frustrations with the inaccuracies of Zestimates. Just look at the comments in that thread I referenced in the previous link. As much as I would love to bash Zillow, I would argue that there is some value to Zillow, but not in the form that you would imagine.

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Reasons Why Zillow’s Home Values Are Not To Be Trusted

Reason 1: Location is only one of three primary contributing factors that comprises a home’s market value. Zillow doesn’t take into consideration two other key variables: pricing and condition of your home in relation to other available homes on the market.

The novelty of using using Zillow is having the ability to insert your address or neighborhood into its search feature for a “real time” home value estimate or a Zestimate within seconds. The problem with Zillow’s algorithm is it incorrectly assumes that your neighbor’s home, which would generally be in close proximity to your home, is truly comparable to your home. Zillow does not know about the number of “capital” improvements you have made over the years as in a new kitchen, furnace, roof, or the addition you put on your home. Zillow does not know that your neighbor had an underground oil tank or wood paneling throughout his/her house that made your neighbor’s home tremendously unattractive to home buyers when it sold. These important data points, like upkeep, updating, additions, heating type, clutter, odor, bad paint jobs can affect real estate values in real life. Let’s not forget that the vice versa could also be true: if your home lacks capital improvements, curb appeal, faces the wrong direction, Zillow’s computer will never know about it. And for this reason alone, you should look, laugh and place to value  a Zestimate. 

Reason 2 Zillow Can Be Duped.

In the past, for sale by owners, these are homeowners not represented by a real estate agent, could list their home for sale on Zillow and set a ridiculous prices called a Make Me Move Price. Make Me Move is a function that allows homeowners the ability to “test” the market without a homeowner having to use a broker or real estate agent. I can not say for certain whether or not the Make Me Move prices is an element of Zillow’s Zestimate calculation, but if you are inserting your own address into Zillow’s search bar and you look at the results map at a glance, you might see a number of overpriced homes available homes for sale and hence set an over-priced asking price for your home. I met several homeowners on Zillow who priced their homes as high as $700,000 when in reality there home value was closer to $500,000. I know what you are thinking. Zillow says my home is worth more? In reality true market value is based on what a real life buyer is willing to pay for your home at the time in the market.

Reason 3 Zillow has a hard time differentiating between different property styles and types.

Zillow can not distinguish between a cape versus a bi-level or even a single family home versus a mother daughter or a multifamily property; It can’t tell the difference between condos from single family detached homes. Cape style homes are generally significantly smaller than a bi-level or split level home, which this style difference does and should influence the home’s value over another. When Zillow Zestimates do not take these property style differences into consideration, you are likely to get highly inaccurate Zestimates.

Reason 4 Zillow Documents Private Sales which can be a double edge sword.

As an agent, I value the private sales information. Although, I know that private sales i.e. sales between friends or family members or even a for sale by owner and buyer, nets a homeowner on average 8-10% less than if their home sold with MLS or broker exposure . This information of private sales, which comes directly from tax records skews Zestimates if in fact private sales are considered in Zillow’s Zestimate, but then again, at a glance, you might inaccurately assume that your home value is comparable to a sale that sold for less than its fair market value.

Reason 5 Zillow knows its inaccurate and they do not care!

At the bottom of the Zillow website, there is a tiny link called Values and Accuracy. On this page you will find a decoder ring to help you understand whether or not your Zestimate is accurate. It looks something like this. In some cases, the index tells you that they are super inaccurate, off by 27% in some cases. This inaccuracy is not something that Zillow wants you to know about or they would have made it more prevalent on their website. I had a hard time looking for it myself and if you are an unsuspecting homeowner, you might have missed it altogether. Zillow Accuracy Chart NJ

Reason 6 Zesimates do not distinguish between homes sales that were foreclosed on or sold at short sale.

Arguably, when you sale your home and have it appraised, a appraiser will make every effort to look for homes that were not discounted due to a desperate seller’s hardship situation. An appraiser will in some cases, make an active effort not to include homes that foreclosed (i.e. sold through an bank repossession). Although, if the market is saturated with distress properties, you will more than likely have to included distress homes as comparable (comps) to your home. But again, Zillow at a glance does not separate normal resale from short sale or foreclosures.

Reason 7 Zillow does not correct correctable inaccuracies.

I participate in Zillow’s Advice, which is their question and answer forum where buyers and sellers can connect or pose questions to other buyers and sellers and even real estate agents. I often see homeowners who complain when they find their home is still listed for sale on Zillow or the sold price of there home is not accurate. This is what I call correctable inaccuracies. I do not see the customer service department responding to those homeowners even though I know they monitor and police the forum. I do not see them making changes to incorrect sold prices. This is problematic and increases the margin of error of Zillow’s data.

Reason 8 To be fair to Zillow, I think I have done enough Zillow bashing and explaining why Zillow sucks in plain English, they do allow homeowners the ability to create an estimate.

This feature allows you to select other data points such as amenities, bedrooms, bathrooms, square footage, etc that can influence your home’s value. I am a homeowner and as much as I love my home. But I am not so sure that I would be able to pick comparable homes objectively. Zillow does allows you to subscribe to your home’s report on Zillow and have the option of requesting similar listings when they come on the market and when similar home sell. I have the ability to do this as well and since I am tapped into several different Multiple Listing Services (for NJ that is), where 90% of all property sales take place, it would be prudent of you to set up a auto email campaign with Zillow in addition to setting up a just sold email campaign with an agent like me.

Reason 9 Zillow needs to do a better job policing Realtors or Agents that abuse Zillow.

I know of hundreds of listings on Zillow that are listed by a broker and have sold yet they still appear as active homes for sales. If they are still listed for sale, their sales data does not appear on the just sold properties, which would be important information for you to know.

Reason 10: At the end of the day, zillow encourages you to contact a real estate agent.

Zillow, by their own admission, wants you to verify that the information you received on Zillow is consistent with an real estate agent’s opinion because only real estate agents have access to 90% of all property sales and only good agents will know which amenities, neighborhoods, property styles, updates and selling situations will give you a true outlook on your current or future home’s value. When in doubt, ask a human. 

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Post By Audeliz Angie Perez (160 Posts)

Angie Perez is a NJ Circle of Excellence award winning real estate agent for Re/Max Select in Westfield NJ. She sells anywhere from 12-25 houses per year on a consistent basis since 2005. Ms. Perez is primarily a buyer's agent on 60% of her real estate sales where she represents rental income investors, first time home buyers & trade up home buyers of 1-4 family homes within specific towns encompassing 4 NJ counties: Union, Essex, Middlesex and Somerset County. Many of Ms. Perez's clients appreciate her ability to negotiate favorable real estate deals for them. Many of her clients commented that her research abilities, her honesty, her knowledge of local market trends and her proficiency to manage multiple real estate transactions from start to close are some of the reasons why she was hired as their agent of choice. Please call, text or email Angie Perez to ask if she lists or sell in your town. If she can not help you, Ms. Perez would be more than happy to help or refer you to someone who can.

Website: → NJ Real Estate For Sale




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3 Responses to 10 Reasons Why Zillow Fails Highly Inaccurate Zestimates

  1. […] This post was mentioned on Twitter by Bruce Craig, Real Estate 101. Real Estate 101 said: 10 Reasons Why Zillow Fails Highly Inaccurate Zestimates […]

  2. Kelly Money says:

    […] This entry was posted in Uncategorized. Bookmark the permalink. ← Drop in homes for sale is strengthening prices in many spots […]

  3. […] check your home value on Zillow by simply inserting your home address to their search bar? Well, don’t trust Zillow Zestimates because they aree highly inaccurate. Get one free home value report from a local Realtor like Ms. Perez¬†with periodic updates of just […]

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