Are Zestimates on Zillow.com Correct?

Zillow’s CEO Spencer Rascoff just gave real estate agents a gift we won’t ever forget: a sure-fire way to show that Estimates can miss by a mile.  How?  By selling his home for much less that what the Zestimate evaluated it at. 

Early this year, Rascoff sold a Seattle home for $1.05 million, 40% less than the Zestimate of $1.75 million shown on its Zillow page.  Zillow recently acknowledged that Zestimates can be inaccurate, but some consumers can still take them at face value.  A Zestimate is just a conversation starter, not final word on Value. 

In addition to highlighting the shortcomings of Zestimates, the Zestimate of Rascoff’s home also brings into focus the potential for some automated valuations to be more accurate than others. 

Unlike Zillow’s property page on the home, Redfin’s page on the home showed a valuation of $1.1 million- much closer to the property’s sale price of $1.05 Million.

Pair that with the fact that Rascoff just paid $1.6 million over the Estimate on his Brentwood, Ca home and I think we can assume their valuation model is not one to base your home price on.