In today’s world of instant access to estimated value sites, such as Zillow and Redfin, Homeowners are sometimes frustrated to discover that their homes are not deemed to be as valuable as similar homes in their area. They may feel that their homes are more beautiful than the neighbor’s; they may have made improvements that should have added more value, etc. The wealth of most families is tied up in their homes; therefore, the wrong estimate can cause stress. Our appraiser advice to you: don’t worry. Here’s why.
Is Zillow accurate? From a technical standpoint, no; but from a ballpark standpoint, yes. If Zillow were wholly accurate, there would be no appraisal industry; but the reality is that an algorithm cannot replace an experienced appraiser who can inspect the property, understand the story of the property, compare the property to others, and analyze market trends. On top of that, Aloft Appraisal adds rigorous quality control and peer review. The result is far more accurate than internet estimates.
Does Zillow know that your neighbor’s house is a tear-down? No, but an appraiser does. On the other hand, is Zillow a good place to see what’s generally happening to values? Yes. Zillow calculates the value of your home using the best available data they can access. The problem is that public data is often missing or wrong; not Zillow’s fault. For example, one homeowner might add a bedroom or bathroom, and may not divulge the addition to the county authority (after all, such a disclosure would invite the county to immediately increase the tax assessment). Therefore, county data, which is where everyone gets data from, is often inaccurate.
Zillow looks at county data and compares it to the MLS database for your area. Estimating property value can be murky because some “non-disclosure” states, like Texas, prohibit the MLS from sharing the final sale price of any property; therefore, internet platforms can only factor in the listing price, not the ultimate sale price. Zillow takes the best data available, then performs a reasonable estimate of property values. It’s the exact same thing you’d do if you wanted to do an amateur estimate on your own; the difference is that Zillow has $100m worth of advanced programming and gives you an answer in a fraction-of-a-second.
Will the internet answer stand up in court? Definitely not. Estimated values by internet platforms are often off by 5%-10%, but it’s enough to satisfy the general curiosity of most people. Zillow and Redfin spend a fortune to acquire and analyze data, and they’re good platforms for ballpark questions like, “I wonder what my property is worth?”, but they’re not appropriate sources for settling estates, getting a mortgage, or making investment decisions.
If you’re upset by what Zillow or Redfin report, be patient. Keep in mind that the true value of your home will always come from a professional appraisal - in every situation that really matters in life. Whether you are selling your home, getting a loan, accessing your equity, settling a divorce, doing estate planning, or disputing your tax assessment, appraisal is the proven way to determine the true value of your home. There is a good reason that investors, attorneys, and lenders rely on Aloft Appraisal, and the least of their concerns is what the internet says.