The Zestimate Method Of House Valuation (Part 2 Of 2)
November 4, 2008
On the previous page, the Zillow process of home valuation - also known as a “Zestimate” - were discussed.
That discussion is continued below, plus alternative methods of home valuation, including connecting with a real estate agent.
What can I do with a Zillow home value calculation?
Pat yourself on the back. Laminate, post on refrigerator. Share with friends. Toast to your online ingenuity.
What can’t I do with a Zillow home value calculation?
Figure out the real value of your house. Zillow freely admits that the Zestimate is no more than the “starting point in figuring out the true value of a house.” In comparison to hiring a professional appraiser to conduct a home appraisal or connecting with a real estate agent to receive a Comparative Market Analysis (CMA), Zillow.com has:
- Never been to your house
- Never seen your expertise with colors and landscaping
- Never offered the Zestimate as the basis of real-estate-related transactions.
Zillow encourages you to share your Zestimate with real estate professionals (you can thank them later). They suggest you use their home value calculation in negotiating, watching the market, and for “personal purposes.” We guess that would fall under sharing with friends.
However, Zillow cautions that the Zestimate is nothing more than a “computer-generated estimate” of a house’s value. They recommend that their formula not be used to determine the price a house will sell for because:
- Their data source may be inaccurate due to incomplete information
- Their data lacks a home inspection done by a real estate professional
What does Zillow recommend I do after I get my Zestimate?
Good question. After receiving your Zillow Zestimate, Zillow personally recommends that you do further research. Due to changes in home price, negotiations, closing costs, and timing, Zillow’s suggest other research such as:
- Getting a Comparative Market Analysis (CMA) from a Real Estate Agent
- Getting an appraisal from a professional appraiser
- Visiting the house
How much should I spend on a CMA or appraisal?
A home appraisal from a professional appraiser is required by the Federal Institutions Reform, Recovery and Enforcement Act (FIRREA) in order to obtain a guaranteed loan from the federal government. Contact your local home appraiser for cost, as it varies based on your location. Our best guess on the cost of an appraisal (we like to call it our “Geppraisal”) is between $300 and $500.
To connect with a local real estate agent and receive a free, no obligation home value estimate, type your zip code in the box in the top right corner of our home page and follow the instructions on the next page.
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