A lot of the homeowners that I regularly work with will cite Zillow’s "zestimate" feature as an accurate price projection of what their property will sell for. I always explain to them that the zestimate tool is just that, another tool that we can use to help us come away with a value estimate for their house. As you see in this article, even the CEO of Zillow sold his home last year for 40% below the zestimate.
Redfin, Trulia, and many other sites have similar evaluation tools. Although I’m not savvy to the exact formulas that go into their algorithms, it’s important for homeowners and homebuyers alike to understand that these are not always accurate, and can be and many times are way, way, way off.
The reason is simple; no one from Zillow, Redfin (Actually they do have buyer’s agents that do come out to your property but as far as I can tell it is not to appraise the properties value but more so to preview the home and give a description from a realtor’s perspective to potential buyers), or Trulia comes to your house to preview it and give you an accurate evaluation. They don’t know whether it’s on a busy street, or whether it’s on a sloped, mostly unusable lot. They don’t know if the layout is funky and if all the potential buyers (who are interested in the the area for the good schools because they have or are soon planning to have children) are turned off because the bedrooms are too close to the family room/kitchen and too far from the master bedroom.
These are things that only a real estate professional with experience actually working with buyers and sellers on a daily basis can tell you about your property when they are conducting a Comparative Market Analysis (CMA). Please keep this in mind when thinking about selling your home, or just inquiring as to it’s value. Most professional, full-time realtors will provide a CMA of your property at no cost to you. At least I will. Call me if thinking about buying or selling in the SF Bay Area, (or anywhere else - I give advice for free too.)