In addition to providing information on active listings, Zillow, the most popular online real estate information site, also provides data on houses not even on the market. All you need to do is enter an address or general area, and you have access to key information — photos, taxes, square footage, number of bedrooms and baths... plus a Zestimate.
According to Zillow, these Zestimates were created to give people a starting point for determining a home’s worth, and are currently based on an algorithm that combines millions of data points from public record and user-submitted data to provide an estimated property value. What most consumers don't realize is that Zestimates nationwide have a "median error rate" of about 8%. Localized median error rates however, can sometimes far exceed the national median, which increases the likelihood that buyers and sellers will have conflicts over pricing. For example, IN WNY, THE MEDIAN ERROR RATE IS ALMOST 20%. Consumers take these values seriously, and quote them to real estate agents as gauges of market value.
Our advice? Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — experienced agents and appraisers. Zestimates are hardly accurate — often far from it, but can start the conversation.