For a job as big as buying or selling a home…

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I get it. Sometimes, prospective home buyers want pricing information for various properties without having to rely on a real estate agent. This is where real estate sites like, and Trulia can come in very handy. These sites are business websites, established to get eyeballs on a bunch of homes for sale and, in turn, to sell advertising to real estate professionals. It isn’t a real estate company with a group of agents.

But given this, can you really rely on the sites’ value estimates? Many have wondered whether Zillow provides accurate data with its Zestimate home price estimates.

Zillow bases many of its value conclusions on opinions formed by using algorithms that process data collected from various sources. No matter how great the algorithm is, opinions are not facts.

Understanding Zillow’s Zestimate
Zillow acquires data by amalgamating all the information on housing it can gain access to. It mixes and merges data from various sources into one source. Many computerized programs exist that can forecast the value of a home. Even real estate agents use computerized programs, but the difference is real estate agents don’t rely on those programs alone. Zillow relies on the artificial intelligence used to assemble its Zillow Zestimates.

At least for now, Zillow cannot predict how a buyer will feel when she enters a home. Zillow can’t tell you whether the interior has been updated, if the workmanship is superior, whether the materials used are inferior, or whether a school around the corner has decreased the value of homes backing up to the football field or any other number of factors real estate agents and appraisers use when they know the neighborhood and have inspected the home in person.

According to their website, Zillow publishes Zestimate home valuations for 97.5 million homes across the country, and uses millions of statistical and machine learning models that can examine hundreds of data points for each individual home.

To calculate a Zestimate, Zillow uses a sophisticated and proprietary algorithm that incorporates data from county and tax assessor records and direct feeds from hundreds of multiple listing services and brokerages. The Zestimate also incorporates a home’s facts and features, which homeowners have the ability to update.

The Zestimate accounts for variables like:
• Home characteristics including square footage, location or the number of bathrooms
• Available data about unique features like hardwood floors, granite countertops or a landscaped backyard
• On-market data such as listing price, description, comparable homes in the area and days on the market
• Off-market data — tax assessments, prior sales and other publicly available records

How Agents Arrive at an Estimate of Value
When agents begin to assess a property, the first thing they typically do is study the home from an overhead, satellite view on Google. They note whether it backs up to a busy street, the proximity to commercial property or freeways, the size of other homes nearby, the vegetation and landscaping, its orientation to the sun and, if available, will view any photos of the exterior plus a street scene.

An agent might then run an automated valuation using specialized real estate software. One is Realist, a company owned by CoreLogic, that is data-centric for all sales, including non-MLS, and will take into consideration surrounding home sales varying 25 percent or less in configuration and type, including other parameters an agent can manually establish.

Another type of automated valuation is based on sales pulled directly from the MLS, and computed based on square footage, including high, low, median and average values of all sold, pending, and active listings. Those two types of automated valuations and the resulting values alone are often very different from each other but, used together, can provide a range of value, generally not more than a 5-percent difference. That process provides a lot of information but still is not nearly enough to establish a strong value conclusion.

Armed with that information, an agent would then inspect the home and look at it through the eyes of a buyer, how an appraiser will view it, and where it would be positioned against the competition to drive traffic to the home. It’s not unusual to enter a home with a prepared listing agreement in hand and end up manually changing the listing price after viewing the home. Automation, such as that used by Zillow, can never take the place of personal assessment.

The Zillow Zestimate of Value Accuracy
Zillow never claims to be 100 percent accurate all the time or even 80 percent accurate most of the time in all areas. If all the homes within a six-block radius are very similar to each other, in a suburban subdivision, filled with homes built around the same year, and about the same size and with identical amenities, a Zillow estimate will be much more accurate because there are not enough specific variances to throw it off. In other cases, such as for older neighborhoods with many homes that have been improved in different ways, it won’t be that close at all.

Real World: Zillow vs. Actual Sale Prices
As reported on, “The home data Zillow compiled to generate a Zestimate home valuation varies by location. Some counties provide all the data one could hope for, but others are lacking such key things as the number of bedrooms and bathrooms, or, in some cases, the square footage of the home.

The more data, the more accurate the Zestimate. And, we’ve made it easier for users to help improve accuracy by incorporating edited home facts into our Zestimate calculations. In some areas, Zillow might not be able to produce a Zestimate at all, but we do have some basic information on the homes. The tables below show you where we have Zestimates and other home information.

To measure the accuracy of the Zestimates, we’ve gone back in time and compared the historic Zestimates with the actual transaction prices of homes that sold. The tables below also provide various measures of that accuracy.

A Zestimate home valuation is Zillow’s estimated market value. It is not an appraisal. Use it as a starting point to determine a home’s value.

For Los Angeles County, CA
(as of June 26, 2019)
Median error: 6.5%
Homes with Zestimate: 2.1M
Within a 5% of Sale Price: 41.2%
Within 10% of Sale Price: 65.3%
Within 20% of Sale Price: 85.4%

Zillow as a Backup Value
In some cases, agents will tell clients to look at a home’s price on Zillow to justify how good of a good deal they are getting when buying a home, providing the Zestimate is much higher than the actual sales price, of course. It’s a selective usage with agents. When the price is to their advantage, they might use it as evidence for their client. Even banks don’t know any better, so in a short sale situation for example, when the offer is more than a Zestimate, a short sale agent might point to the Zestimate when in negotiations with the short-sale bank.

Yet, Zillow offers so much more for the consumer than the Zestimate aspect. In some ways, viewers get so hung up on the Zestimate that they overlook the wealth of other information on that website that includes hard facts, pertinent data,comparable sales and neighborhood demographics, all of which can be invaluable to any first-time home buyer or home seller in a real estate transaction.

If you are embarking on the process of buying or selling a property in Los Angeles, by all means, access, review and consider every tool at your disposal. But when it comes time to evaluate and set prices, please consult a real estate professional with the expertise and track record to help.

Of course, if I can be of service, don’t hesitate to call.

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