Can I trust Zillow estimates?

Zillow is a billion-dollar Internet marketer that "gives" automated estimates that purport to figure the value of each property in the United States. Zillow tries to achieve this this feat by using a sophisticated logarithm which crossreferences factors which impact home values, but here's a story I have heard from real estate sellers in Northern Virginia:

Is Zillow accurate? — Many consumers have serious doubts about the accuracy of Zillow home value estimates.

Our home was recently appraised for 650K. Zillow estimates the value at 521K. The estimate makes us one of the lowest priced homes in the subdivision. We have all upgrades in our home and it is the largest of the homes that were originally built in this subdivision. It was appraised at 750K before 2009. Our home has a basement. Neighbors do not have basement on one side and you appraised higher. Really? -- James E. - Fort Hunt

If you Google the Internet for the phrase "Can I trust Zillow?" or "Can I trust Z-Estimates" you'll find countless complaints by upset homeowners and leery home buyers who have discovered the hard way just out inaccurate Zillow's pricing can be. Many people in Burke Village say that Zillow's valuations have a margin of error of around 20%. Even if we assume the margin of error is only 10%, in Northern Virginia that means a "z-estimate" is only within $50,000 of the actual sales value. If the margin of error is an unlikley 5% that means that a z-estimate is only within $25,000 of the asking price.

Yet Zillow (for now) remains popular with some people. Property owners and home shoppers should understand that there is not a single community in Burke Village where either a bank or tax collector uses Zillow for tax assessment or appraisals. Our expert advice is to take "valuations" from any computer with a grain of salt. Putting too much trust into a computer can cause a lot of irration.

Contact one of our agents today for a free comparative market analysis of your property's value. We promise that a computer won't set the ideal price. Rather, your friendly neighborhood Nesbitt Realty real estate agent will take into account the unique variables which make up your property's market value.