How Does Zillow Know How Much Your House Is Worth

Jon Effron


If you own a home, want to buy a home, or simply want to know how much someone you know who owns a home paid for their home, this post is for you.  If I've been asked once, I've been asked a thousand times: "How does Zillow know how much my home is worth?"  Great question.  How do they know?

From Zillow, a few words regarding their Zestimate:

The Zestimate® home valuation model is Zillow’s estimate of a home’s market value. The Zestimate incorporates public and user-submitted data, taking into account home facts, location and market conditions.

It is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.


Let's cut right to it: Zillow doesn't know how much your house is worth. Sometimes, they're right.  Other times, they're not. And to their credit, they know this.  I'm not here to bash Zillow- they've revolutionized the real estate game, and for many home buyers and sellers, it's considered the gold standard (which in and of itself might be enough for its own blog post).  But let's face it: you can't trust an algorithm that has never been inside your house, doesn't know the particular nuances of your market, the value of certain amenities and upgrades, and the general temperature of your area.  Not yet, at least!

So if you want to get a general idea of how much your despised colleague paid for his home?  Zillow's a great start.  Curious about how much your neighbor's house is worth?  Kind of weird, but go for it.  Looking for the value of your own home?  Call a pro.  




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