How Much Is Your Castle Worth Online?
If you are a seller you need to be prepared for buyers citing the valuation of homes that is produced by Zillow’s Zestimate model. Zillow and other web sites such as Trulia use what is known as an AVM (Automated Valuation Model) algorithm that utilizes Public Records to produce an estimate of a home’s value.
There are inherent issues with any AVM mathematical model in that no matter how sophisticated they claim to be they can not factor in a home’s condition, improvements, and other factors that can only be ascertained by a professional that make a personal visit to a property. Automated estimates are also subject to differences in Public Records with respect to important aspects of a home such as square footage and the number of bedrooms and bathrooms. I have often observed significant differences in these data points in Delaware County Public Records.
I did a quick review of 4 homes that recently settled in Wallingford and compared Zillow’s Zestimate against actual selling prices. The range of accuracy was quite varied, the closest being 3.6% lower than the actual selling price and the largest variance coming in at 16.3% lower than the actual selling price. In other words that variances amount to real money – a 16.3% variance on the average selling price of a single family hone in Wallingford this year of $290,888 comes to almost $47,500, a 3.6% variance amounts to almost $10,500.
In Zillow’s published accuracy tables the Zestimates produced for home in Delaware County claim to have a median error of 6.2%, with 40.9% of estimates coming in within 5% of the selling price, 71.2% being within 10% of the selling price, and 88.3% of estimates within 20% of a homes selling price.
I think is wise for a seller to be aware of the estimated value of their home that buyers are seeing and searching for on the web, but the word estimate makes up a majority of the word Zestimate and it is just that – an estimate.
Wallingford PA Real Estate – Wallingford, PA 19086
