Can you trust the Zillow Zestimate in the Cedar Valley?
Read more below to learn what this Cedar Valley realtor discovered
Are you looking to sell your Waterloo or Cedar Falls home and are interested in what your home is truly worth? Can you trust the Zillow Zestimate in the Cedar Valley? Is it a fair representation of the market value of your Cedar Falls or Waterloo home? While I’m sure is is relevant in many places, the answer to these questions is that the Zillow Zestimate is NOT a fair representation of the market value of your home in the Cedar Valley. I have always been frustrated by the general public latching on to the Zillow Zestimate as a good valuation for their home or property, let me explain why.
For example, Homes for sale in Cedar Falls (which is the city I used for this exercise) have always held a higher value than homes for sale in Waterloo. Differentiating those values when you take into account some of the houses in Cedar Falls city limits that attend Waterloo schools and vice versa (which does affect property values significantly), as well as the many other factors that affect property values, it is a tall task to accomplish. A company in Seattle tries to give estimates on property values across the country attempting to help the home buyer on the internet who is doing the smart thing and educating themselves on what they perceive to be neighborhood or city home values.
I thought it was time I did some comparisons between actual sale prices on Cedar Falls homes for sale and the Zillow Zestimate for those homes. I selected the first 40 home sales in Cedar Falls beginning in December of 2014. Here is what I found in what I know is a very small sample size. I am confident the numbers won’t change much when my sample size increases.
Of the 40 Cedar Falls homes for sale that were analyzed, 16 of them had a sales price of $200,000 or more. On average those 16 home’s Zestimate values were 12.8 percent off from actual home sale prices. The other 24 homes with sale prices that lay below the $200,000 mark had Zestimate values that averaged 5.6 percent deviation from actual sales prices.
Unless you’ve owned your house for 10-15 years or more, you probably have a decent idea of the value of your home. I would suspect it’s within that 5 to 6 percent range that Zillow is giving you. When you get above $200,000 it seems Zillow loses credibility in the Cedar Valley. Nearly 13 percent deviation is a big number when we’re talking about $200,000-$500,000.
This is where my frustration as a Cedar Valley realtor comes in. That Zestimate has now possibly given Mr or Mrs Seller a skewed or inflated perception of their home value. The problem, from the realtor’s perspective, is that we are now required to sell ourselves on why we are more knowledgeable than a company who advertises on national TV and has all the information on the specific home. The fact is, Zillow’s information is grabbed second hand from other sites and is not correct in many instances. There in lies another factor that is impossible to apply. When approaching a market analysis for a property, a Realtor needs to differentiate or segregate home values between adjacent neighborhoods just blocks apart. It’s hard to believe that someone without the local market knowledge could even attempt to differentiate between neighborhoods in this manner. I then go through the same conversation that started this blog in my attempt to sell the client on why my local knowledge is far greater.
Meanwhile Mr or Mrs buyer is looking online for homes to buy. They find the right house, walk through it with their realtor of choice, and decide that it’s time to make an offer. As we prepare to write the offer the buyer will then decide their purchase price, or what they believe to be the market value of the home. So what happens when the Zillow Zestimate is $30,000 lower than the market value of the home and that’s what the buyer wants to offer?
We as realtors have access to all the information to dispute their claims, but it is frustrating when your expertise in the market is not trusted.
Lessons to be learned:
- Always contact your Realtor for property valuations
- The internet isn’t always right!
As a professional Cedar Valley realtor with years of experience serving this area, I want to be the first one to help you understand the true value of the home you own today or the home you want to buy. I make it easy with a FREE Market Analysis form. Fill this out and in a few clicks I will be in touch with the market value of your home.
Brian Wingert is a professional Cedar Valley Realtor offering Cedar Falls homes for sale, Cedar Falls condos for sale, Waterloo homes for sale, Waterloo condos for sale, Waverly homes for sale, Elk Run homes for sale, Evansdale homes for sale, Hudson homes for sale, and Dike homes for sale.
Brian Wingert, Realtor