Can You Trust Online Home Value Estimates?

Whether you’re ready to list your home for sale or you’re simply curious about your local market, you might be intrigued by real estate sites like Zillow and Redfin that provide home value estimates. These estimates are extremely convenient and easy to find, but are they accurate and should they be trusted?

The easy answer is no. Real estate sites use automated algorithms that determine home value estimates based on bedroom and bathroom count and the price per square foot of other houses in an area. That’s it. These algorithms have no way of assessing the condition of a home, the quality of the materials, or the cost of any upgrades.

For example, say that you live in a 3,500 sq ft colonial. You have top-of-the-line finishes, premium appliances, energy efficient HVAC, and on-trend decor. Your next door neighbor also lives in a 3,500 sq ft colonial with just as many bathrooms and bedrooms. However, their home wasn’t cared for as well and is in need of major renovations. Online home valuations will blindly assess both homes and assign them the same value, failing to incorporate the value of premium finishes and aesthetically pleasing updates.

While checking your home’s “Zestimate” on Zillow can be informative if you’re just interested in the ballpark figure of a home’s worth, relying exclusively on online home valuations can be detrimental if you are planning to buy or sell a home. If the estimate suggests a value that is actually lower than the fair market value of your home, you could unknowingly miss out on a higher sale price. Or, if the Zestimate suggests a value that is much higher than the actual fair market value, you run the risk of setting too high an asking price for your home and wasting days on market due to an inflated price.

Rather than rely on inaccurate home value estimates, consult a real estate professional to gauge your home’s current market value. Experienced Realtors can do what real estate sites cannot: pull true comparables from your area based on in-person observations, not just algorithms, and factor in the value of recent renovations, energy-efficient features, and on-trend finishes. Curious about what your home is currently worth? Ask one of our local experts!