I got a call the other day from a client of mine who asked me why the information that I sent him was different than the information he got from Zillow. Today I want to explain a little bit about how Zillow calculates its home values and why they would differ from a Realtor’s estimate.

Whenever people ask me about this issue, I always ask them “When was the last time Zillow was at your house?” As we all know, they don’t come to your house. Zillow uses a computer algorithm of third-party data such as county records and sold data to formulate the price of your house.

If the data Zillow is using has improvements—say, one of your neighbors remodeled their kitchen and made their home value a little higher—that value gets transcribed over to your property and gives it an inaccurate value.

“When was the last time Zillow was actually at your place?”

There are other situations where Zillow’s limitations can distort a home’s value, too. If somebody has refinanced their house and they only need $200,000 even though the house is worth $350,000, Zillow records that $200,000 transaction and adds that into the algorithm. Buyers shopping on Zillow see that inaccurate information and are tempted to offer less for that home.

This is where you need a Realtor to look at your home’s information, examine the comparables in the surrounding neighborhood, and give you a better idea of what it’s really worth.

Of course, no matter what, your house still has to appraise. That’s why when we determine the value of a house, we look at it like an appraiser. We review sold data from the past six months, compare homes that are similar to yours in terms of square footage, and look at pictures of those homes. We’ll then ask if you think those homes are better or worse than yours before assigning a value.

If you’re a home seller, remember that Zillow is a great tool, but it’s not as accurate as what a Realtor can tell you. If you’re curious what your home is truly worth, give us a call or send us an email. We’d love to help you.