The "Zestimate" Explained
Determining the value of your home can be one Herculean task when it comes to selling a property. Price it too high and you will be stuck with the property for longer without finding a buyer. At the same time, when you price it too low, you risk making a considerable loss.
There is a need to get an accurate estimate; this ensures that you sell your home within a reasonably shorter period and at the same time get the desired profit. There are a number of ways that you can estimate the value of your home, like resorting to the use of agents where they use their skills and expertise to determine the price.
Or you may want to delink your selling process from an agent or a broker and complete the sale on your own. If you opt for this method, you increase your gains since there are no broker fees but, on the flipside, you can have a hard time, especially with some of the complex stages.
However, with proper guidance, you can complete the whole process on your own. Estimating the value of your home can be one of the most complex steps but with tools that can be accessed on the internet, it all becomes easy. One tool that has proven remarkably effective in this process is the Zestimate.
It's been found that Zillow's Zestimate has a nationwide error rate of 1.9% for on-market homes. For off-market homes, that number goes up to 6.9%. So what does the Zestimate look for in it's algorithm?
The more homes sold near you (that are similar to yours in size, style, age, and condition), the more accurate your Zestimate will be. So, if you have a unique home OR very little homes sold near you (rural areas), chances are the Zestimate will not be very accurate.
Current Housing Market Data & MLS Inventory
Zillow's algorithm is closely attached to how the local market is performing. You will find graphs like the one below that shows home values over extended periods of time.
Updated Facts, Features, and even Photos
The reason why Zillow's Zestimate is more accurate for homes currently on the market is because all of it's information and photos have been updated through the MLS. It's algorithm can even tell the difference between a granite counter top and a laminate, carpet and luxury vinyl, and freshly painted walls. So if you do have your home listed For Sale By Owner, you'll want to provide as much information as you can to get the most accurate home value.
If your home is NOT listed on the market, Zillow pulls it's facts and features from county records. If you've made improvements to your home, Zillow will not be able to see this.
Tips to Increase Your Zestimate
Before anything else, you need to familiarize yourself with Zillow (Click here to see how to claim your home) – get a list of all the amenities that are provided on the site and carefully check those that apply to your home. You need to ensure that you have indicated all, as each of the amenities will greatly influence the score of your Zestimate.
For instance, if you have an attic, upon checking it in the box, offer a description of the condition it is in and any features that are likely to attract buyers. Providing such details, and more so when they are factual and up to date, increases the chances of scoring a higher Zestimate.
Lack of data will result in the tool giving you a valuation that is lower than the actual. So, the trick here is to have detailed information of your property and making sure it’s accurate and up to date.