With its introduction in 2006, Zillow changed the way the public views real estate, providing a user-friendly platform that draws about 171 million visitors each month, according to the company. But the arrival of Zillow has not come without headaches for the consumer, especially when it comes to the company's Zestimate.
"Zillow estimates the value of each home based on a complex algorithm and lists that value as a Zestimate," explains Rick. "The problem is that the estimate can have a substantial margin of error."
In fact, Zillow's own statistics show that in Clackamas County the Zestimate is within 5% of the actual selling price only 51.7% of the time. "With Wilsonville's median home value of around $428,000, that 5% is a difference of over $20,000, which can be big to buyers and sellers."
The company's own data further shows that even at a wider margin of 20% within actual sales price, Zestimates can still miss in Clackamas County almost 9% of the time. Rick explains that, "In Wilsonville, this could mean that an average home has almost a 1 in 10 chance of receiving a Zestimate that differs from market value by over $85,000."
Such differences can cause problems for buyers and sellers, leading sellers to believe their home is worth more than the market supports or causing buyers to question a seller's market-value list price.
When it comes to determining home value, Rick recommends that buyers and sellers turn to a local Real Estate Agent. "A skilled Real Estate Agent uses local information on recently sold and pending homes to establish a value range specific to each home," he explains, "And this approach is generally far more reliable."
The Laue Team
15400 Boones Ferry Rd
Lake Oswego, OR 97035