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A lot of people get confused by Zestimates. Whether they’re buying or selling, whenever they go online and use one to calculate a home’s value, the number always seems way off. Why?

Being from Arizona, I can tell you that getting a Zestimate is like getting salsa from New Jersey. Nobody in their right mind trusts salsa from New Jersey, and I don’t want you to trust Zestimates, either.

The important thing to know is that a Zestimate is calculated by using a computer algorithm. This algorithm doesn’t evaluate the inside of your house or any upgrades that you’ve made to it. Additionally, it doesn’t factor in your location or the home’s age. All a Zestimate really does is a radius search of the average price per square foot of surrounding properties. The algorithm then consolidates that data, and if there’s not enough of it (which is often the case in rural areas like ours), they look to the tax assessment value as a part of their computation.

Getting a Zestimate is like getting salsa from New Jersey.

Do you really want to buy a house based on the tax assessment value? Probably not, but that’s the best a Zestimate can do. In their defense, Zillow knows this and admits that they’re not entirely accurate. If you google “Zillow,” “Zestimate,” “data,” and “accuracy” in the same search, you’ll see tables that explain this flawed system. In fact, I’ve already done this search on my website. For a thorough county-by-county breakdown, check it out at AZHeartland.com.

When it comes to knowing the real value of your home, you want boots on the ground. You need somebody who’s inside looking at it with you and looking at all the comparables so you can price it accurately. If you’re a buyer in this market, Zillow is a great jumping off point, but it’s not the only way to go. At the end of the day, if you’re getting a loan, the appraiser is not looking at Zillow. They look at recent comparable sales, and that’s what makes all the difference.

If you have any other questions about this topic or have another real estate-related question in mind, call me, email me, or just visit my website. I hope to see you very soon!