To us Real Estate Brokers - Zillow has grown from simple website, to competitor, to a 500 pound gorilla in just the past couple of years. While Zillow does provide some great tools to estimate parts of the home buying process (I personally use their mortgage tool for monthly payment estimates), it doesn't - nor should it replace a human Realtor like myself.
And I'm not the only one saying that. Here's what Zillow CEO Spencer Rascoff has to say:
"When we were trying to figure out the price for the house that we bought, we relied on the expertise of the real-estate agent to help us decide what to pay. The Zestimate, at that point, was less important..."
“We call it a Zestimate and not a zeppraisal and not a zeprice. It’s meant to be a starting point. To determine a more accurate opinion of a home’s value you should hire a real-estate agent, or more to the point, you should sell the house and then you will know how much it’s worth.”
A home's "Zestimate" is based on an algorithm. It's very big picture and basically calculates a home's worth based on the average price per square foot for houses in the neighborhood and multiplies that by the home's square footage. And that isn't bad...as a first step. There are many more factors us flesh-and-blood Real Estate Brokers take into account when pricing a home.
Are the other houses remodeled? Updated kitchens and baths? Are yours? Is your home on a busier road? Cul-de-sac? Landscaping differences? Have you added anything to the house? Have the others? How does the inventory now compare to the inventory at the time of the other homes' sales?
Once I actually compare all the "comps" and give a price estimate, then the biggest factor is the seller's motivation. If a job has forced them to relocate quickly then mostly likely they're more motivated to sell quickly and stop paying the mortgage for a home they no longer live in - so you'd price the home on the lower end of the range. If time isn't a factor then you'd start high.
Much like ZIllow's home search - it's a good starting point, but it's not the final word. For a more exact answer on any home you might be interested in buying or selling, give me a call!