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How Accurate is Zillow? / Is Zillow Zestimate Accurate? - YouTube
Channel: Melissa Spittel - Maryland Real Estate Expert
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Zillow... it's the #1 website and app used to聽
search for houses and to find out what a house is聽聽
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worth, and it seriously makes me cringe. I can't聽
tell you how many times I've heard a homeowner say聽聽
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"Zillow says my home is worth" (just insert any聽
random dollar amount, because those estimates聽聽
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really are that random) and I can't tell you how聽
many times I've also heard buyers say "I want to聽聽
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offer x amount of dollars and not a dollar more聽
because the Zestimate says the house is worth this聽聽
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much". Do you honestly believe everything you聽
see and read online? (please say no). Welcome聽聽
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to this edition of Real Estate Unlocked". I'm聽
Melissa Spittel the local real estate expert.聽聽
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In this video you'll learn why trusting those聽
estimates is like trusting those people who聽聽
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send you an email telling you you're the lucky聽
recipient of a huge inheritance from a long lost聽聽
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family member you never knew about. Let's get聽
started. Zestimates...where do they come from?聽聽
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Consumers love instantly knowing the value of聽
houses because let's face it we've become a聽聽
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society of I have to know right now. So they all聽
look on Zillow because it's readily available,聽聽
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it's easy, and the Zillow platform looks good and聽
because it's online. For some unknown reason they聽聽
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believe it is fact but here's the cold hard聽
truth that a lot of people have a hard time聽聽
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understanding... zestimates are just a聽
dollar amount that's determined by an聽聽
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automated computer program. That's right聽
there's no actual person who researches聽聽
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houses. There are many factors the computer聽
program doesn't know about any given house.聽聽
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These missing factors can cause the true value聽
to be higher or lower and I gotta tell you the聽聽
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actual value is almost always off from what zillow聽
predicts. But hold on there. Zillow has gotten聽聽
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sneaky! Keep watching and I'll let you in on a聽
little secret they don't want you to know about.聽聽
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Here's a great exam) sold his home. His聽
zestimate said it was worth 1.75 million,聽聽
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his home actually sold for 1.05 million which聽
was much less than the zestimate. Actually it聽聽
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sold for 40% less than his zestimate, wonder how聽
that made him feel? When you finish watching this聽聽
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video I want you to do something you'll probably聽
be amazed. Go on zillow, type in your address and聽聽
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see what the zestimate is for your house. Now do聽
the same thing on redfin and on realtor.com too.聽聽
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You're most likely going to see different values聽
for your house. Are any of them right? Is one聽聽
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better than the other? Are they all wrong? Here's聽
the problem... one of the things zillow and those聽聽
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other websites use to calculate the zestimate聽
is a home's assessed value which is found in the聽聽
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public records and easily accessed. Heck anyone聽
can access the public records and get that same聽聽
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information that's why they're called public聽
records. The problem is that the assessed value聽聽
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has nothing to do with the home's real market聽
value. Assessments are determined by the local tax聽聽
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offices and are used as the basis for collecting聽
property taxes. The assessed value is usually聽聽
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much different than the true market value of a聽
home and if the public records for our house are聽聽
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wrong and yes they sometimes are, the zestimate聽
is guaranteed to be wrong too. For example the聽聽
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square footage may be wrong or the number of聽
bathrooms may be wrong in the public records.聽聽
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Sometimes the public records will report a聽
home has an unfinished basement when in fact聽聽
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it's been finished. The public records may report聽
there's a fireplace in the home when there is no聽聽
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fireplace whatsoever. Just because they are public聽
records and zillow relies on that information聽聽
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doesn't always mean it's correct. Just wait till聽
I share the sneaky part. So how are you supposed聽聽
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to know what your house is really worth? Real聽
estate agents and appraisers determine a homes聽聽
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value based on comparables. I hate to tell you聽
this but appraisers just don't use zestimates to聽聽
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determine what a house is worth. A comparable is聽
a similar home that has recently sold in the area.聽聽
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Things such as square footage, the number聽
of bathrooms, the number of garage spaces,聽聽
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the presence or absence of decks, fireplaces聽
and any upgrades are taken into consideration.聽聽
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Has the kitchen or bathroom been upgraded?聽
Zillow has no way of knowing or factoring it in.聽聽
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Maybe the basement has recently been finished聽
zillow doesn't know that either. An extra bathroom聽聽
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added? You guessed it Zillow doesn't know that聽
either. All of these types of things add value聽聽
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to a home but unfortunately zillow doesn't know聽
about it. Zillow and other websites also have a聽聽
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tendency to obtain its data from areas that are聽
too far away from the home being valued this can聽聽
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skew the home's real value. Home values are local聽
and can vary from one neighborhood to another,聽聽
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from one school district to another, from one zip聽
code to another. Zillow doesn't necessarily know聽聽
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all the boundaries that affect a home's value.聽
Who wants to sell their home for less than it's聽聽
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really worth? No one. If your zestimate is too聽
low and you rely on it you'll be selling your聽聽
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house for less than if you trusted a real person,聽
a professional, to determine your home's value聽聽
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and if your zestimate is too high you won't be聽
selling your house at all because buyers don't聽聽
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look at overpriced houses. So if you're thinking聽
about selling your house and you're checking the聽聽
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zestimate on zillow stop it! Here's a story I want聽
to share with you... some home owners contacted me聽聽
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to sell their house and I spent hours reviewing聽
the comparable homes that had recently sold,聽聽
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the ones that had gone under contract and the聽
ones that were for sale at the time. I shared and聽聽
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explained the real and most up-to-date information聽
with those homeowners. I then suggested a list聽聽
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price and also shared what they could expect聽
their house to sell for. Wow they looked at me聽聽
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in disbelief and became silent, they didn't know聽
what to say or do. They weren't exactly happy with聽聽
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what they heard because it's not what they wanted聽
to hear but guess what? They had been watching聽聽
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their zestimate on zillow. Of course the zestimate聽
said their home was worth much more so their trust聽聽
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level in me wasn't what it should have been so I聽
said "okay let's list your house at the zestimate聽聽
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and give it a try for a week" and guess what聽
happened? There were no showings that entire week聽聽
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(no I'm not making this up). Not one person went聽
to look at it the homeowners couldn't believe it聽聽
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so as planned we adjusted the price to what my聽
research indicated it should be and guess what聽聽
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happened? Many different buyers started looking聽
at the house it went under contract quickly聽聽
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and it sold. Here's something else you probably聽
don't know... zillow uses the exact same formula聽聽
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to determine zestimates whether homes are located聽
in California or right here in Maryland. Do you聽聽
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honestly think the same formula can be applied and聽
be accurate everywhere? Of course not. Now here's聽聽
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that sneaky part I mentioned earlier I see this聽
happen over and over again. You have The zestimate聽聽
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for a house. The house goes up for sale and the聽
list price is quite different from the zestimate聽聽
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and guess what happens next? The zestimate聽
suddenly changes to the list price or very very聽聽
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close to it. Yes zillow adjusts those zestimates聽
right away. So what about that initial zestimate?聽聽
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Was it wrong? After all they'll tell you it has to聽
do with metrics data and other excuses. In reality聽聽
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it's because zillow doesn't know anything about聽
houses and they use the valuation done by real聽聽
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people who have actually been in the house. And聽
then they copy it when a house goes on the market.聽聽
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Ultimately these zestimates can't be trusted as聽
being accurate. Whether you're buying or selling聽聽
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do yourself a favor and trust a real person who聽
knows the real estate market, someone who actually聽聽
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knows the neighborhoods and surrounding areas.聽
I'm Melissa Spittel the local real estate expert聽聽
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where it's always about "KEYping It Real". Do me a聽
favor... if you want an accurate idea of what your聽聽
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house could sell for give me a call or send me聽
an email. I'll do the work ,it's free and there's聽聽
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never an obligation. Be sure to stay up to date聽
with the latest market and community information聽聽
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the best place to do so is right here on this聽
channel. It's so easy to do just subscribe to聽聽
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