How accurate are Zillow Zestimates and other automated home valuation estimates?

According to a web article I found published by Zillow, the nationwide median error rate for the Zestimate for on-market homes is 2.4%, while the Zestimate for off-market homes has a median error rate of 7.49%. The Zestimate’s accuracy depends on the availability of data in a home’s area.

The Zestimate is an automated estimate. Automated estimates generally compare a home to other nearby comparable homes in some systematic manner.

They’re worth looking at. Before I show a home, I normally check the Zestimate, Realtor.com, and a couple automated ones that are available to realtors.

Generally, the more homogenous a home is, the more accurate the automated estimate should be. If it’s a relatively new home in fairly good condition in an area with several comparable homes - - especially if it’s in a large subdivision - - then the estimate of potential selling price should be decent.

The more you add differentiating factors, the less accurate estimated home selling price should be. For example: the age and condition of the home, additional land, outbuildings, additional unique amenities, furnished basements, if it’s in a rural area, etc. All of these could contribute to an automated estimate being less accurate.

BUT, those same factors would cause a good differentiation among human appraisers.

Ultimately it’s a subjective process whether or not it’s Zillow or a human appraiser. Looking at the automated estimates gives a home buyer more information to help them make the most informed decision about what they should offer for a property.