The Fine Print of Online Home Value Estimators
Which online home value estimator is best?
Zillow? Redfin? Trulia? Realtor.com?
A friend recently asked this question as he pulled out his phone to show me (Kevin) the random values assigned to a rental property he owns:
Zillow: $497,945
Trulia: $511,147
Redfin: $466,655
Realtor.com: $313,162
No wonder he was confused!
He was considering selling but wasn’t sure if he would make $150,000 or $350,000 from the sale.
In our world, a $200,000 question is always a fair question.
So we've done some homework for you and here is what we found (in their own words):
Redfin's Estimate "…For off-market homes, the Redfin Estimate will be within 6.15% of the eventual sales price half the time."
Zillow/Trulias's Zestimate® 65% of the time a Zestimate® is within 5% of a home's sale price.
Realtor.com's Market Analysis No stats provided. Estimation is calculated based on tax assessment records, recent sale prices of comparable properties, and other factors.
In summary, roughly half the time Zillow and Redfin can accurately give a $50,000-$65,000 range for a $500,000 home, and we know no accuracy stats about Realtor.com.
By comparison, RAGE listing prices are within 1.85% of sold price over the last 2 years. That's 3x's more accurate than Zillow and Redfin.
We're not trashing Zillow or Redfin. They have wonderful, easy-to-use apps and websites backed by incredible technology. But, like any free website, you are the product they sell and their goal is to get you on their site so they can sell your information to a local real estate expert.
We're here so you can cut out the middle man and talk to us directly!
So, take this wise advice, in Redfin and Zillow's own words:
"...the Redfin Estimate is just a starting point—it is not an appraisal or a substitute for the expert pricing advice of your real estate agent." - https://www.redfin.com/redfin-estimate
"...the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home." - https://www.zillow.com/zestimate/#acc
We're always here and happy to help. Hopefully this post serves you well!
- Josh & The RAGE Team
P.S. Still curious what the correct value of our friend's rental home was? Our market analysis pegged the value at $400,000 -- a full $66,000 below Redfin's closest assessment, so he decided not to sell. We're glad he checked with us!
Sources:
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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
