In our fast-paced world, instant information is at our fingertips. This includes the real estate market. Homeowners often turn to tools like Zillow’s Zestimate, Redfin, and other sites for an instant home valuation. While these tools are convenient, they should be seen as a starting point, not the definitive answer when it comes to determining your home’s worth.
Real estate is high-tech, but it’s also high-touch. Yes, computers can generate data with algorithms, but there’s no replacement for the human touch when it comes to identifying the unique factors and intangibles of your home.
Many homeowners rely on Zillow’s Zestimate to gauge their home’s current value. However, the tool is not a favorite among the real estate community, and for good reason. In Los Angeles County, 38% of homes sell for more than 5% off their Zestimate. Considering the median sale price for a home in LA County last month was $884,000, this could mean the value is off by as much as $44,000. That’s substantial.
The situation becomes even trickier if your home is off the market and Zillow lacks up-to-date information. The national median error rate for off-market homes is 8.5%, translating to a potential $72,000 difference based on LA’s median sales price. In fact, Zillow’s fine print indicates that in LA County, the Zestimate could be off by as much as 12%. For a million-dollar home, that’s a $120,000 difference. The algorithm doesn’t account for home improvements, specific locations, or neighborhood nuances just a few blocks away.
Let me share a few examples where homes sold significantly over their Zestimate. Recently, we had a home with a Zestimate of $1,089,000. After repainting, staging, and some additional work, we sold it for $1,205,000—$115,000 over the Zestimate. The home sold in just under a week.
Another example is a townhouse in Northridge, California. Zestimate valued it at $676,000. After new flooring, painting, and staging, we sold it for $710,000. Our professional photos and video generated an offer $34,000 over the Zestimate. It’s common for us to sell properties $50,000 to $100,000 over list price because we take care of the prep work that enhances a home’s value when it hits the market. Zillow’s algorithm doesn’t capture this.
No one wants to leave money on the table. It’s crucial not to rely solely on Zillow. If you’re looking for a general idea of your home’s worth, these tools are fine, but don’t use them as the end-all for your home’s value. For a detailed conversation about your home’s true value, especially with prep work, reach out to us.
I’m Scott Himlestein with the Scott Himlestein Group, your Los Angeles realtor. Give me a call at (818) 396-3311. That’s (818) 396-3311 to answer all of your questions. Thanks for watching this video!
