What are Zestimates?
Zestimates are a statistical model, generally referred to as Automated Valuation Models. They use public information to try to determine the expected price range on any give home. The accuracy can vary greatly depending on the amount of information available.
One of the biggest factors that affect the final sales price of a home is condition and finish. This is the biggest weakness of Automated Valuation Models: they have no way to take this into account. In neighborhoods with similar age, style and size of homes with lots of recent home sales, they tend to be more accurate. In areas where age, styles and size vary or there isn't a lot of sales, the accuracy tends to be much lower.
Experienced active real estate agents are able to take into account the unique features and condition of your home to arrive at a listing price that they would expect your home to sell at in the current market. Click here to start your free Home Valuation.
Here is some information from Zillow regarding the rating score and how that effects the accuracy:
ZESTIMATE ACCURACY/STAR RATING:This rating is tied to the Median Error in an area. The ratings are as follows:
- = Best Zestimate
- = Good Zestimate
- = Fair Zestimate
- = Tax assessor's value, or unable to compute Zestimate accuracy
- 0 stars = No valuation
WITHIN 5% OF SALE PRICE: This is the percentage of transactions in a location for which the Zestimate was within 5% of the transaction price. Nationwide, Zestimates are currently within 5% of the final sale price 53.9% of the time.
WITHIN 10% OF SALE PRICE:This is the percentage of transactions in a location for which the Zestimate was within 10% of the transaction price. In the U.S. as a whole, Zestimates are currently within 10% of the final sale price 75.6% of the time.
WITHIN 20% OF SALE PRICE:This is the percentage of transactions in a location for which the Zestimate was within 20% of the transaction price. Nationally, Zestimates are currently within 20% of the final sale price 89.7% of the time.
MEDIAN ERROR:Half of the Zestimates in an area were closer than the error percentage and half were farther off. The median error rate for the country is currently 4.5%, meaning half of Zestimates nationwide were within 4.5% of the final selling price, and half are off by more than 4.5%.