What do you do with a Zillow Zestimate?

In the post below, I have shown comparisons of Sold price vs. Zillow Zestimate and Cyberhomes valution of the most recent recorded sales.  Why do we need to know this, and how do we use this information?

1) Short Sale vs. Zestimate – Was buying a short sale worth the extra hassle?

SS#1 – the Zestimate is identical to the 2008 assessed value. The Cyberhomes value is also almost exactly what the owner paid for it in March of 2006.  So neither was needed, as most buyers would look at assessed value and what the owner paid for it. This short sale is good for an “end user”, but not for an investor.  The discount of 5% under the Zillow Zestimeate and 10% under the Cyberhomes value equals the hassle, no more and no less for this buyer.  But there was a buyer before this buyer who waited around for 60 days for the bank to not approve the original offer price.  The first buyer flushed out what the bank would take.  The second buyer had the advantage of the first buyer’s hassle factor.

SS#2 – This is a good one.  The assessed value, Zillow Zestimate and the Cyberhomes values are all about the same.  This is down where current prices are about equal to 2008 assessed values in Auburn and Federal Way.  So this sold for 20% under fair market value and 30% under what the current owner paid for it. Hard to see the hassle factor, as it looks like they didn’t put this one as pending until they had bank approval, which was 10 days or so before it closed. This one is a stereotypical good Short Sale from the buyer’s standpoint and the Zestimate and Cyberhomes valuations and assessed value all confirm the discount.

Now that you know what a good and bad short sale looks like relative to a Zestimate, et al, you can see that SS#3 = not so good, SS#4 = Zillow’s way over on this one.  Assessed is $717,000 Cyberhomes is $794,000, the owner paid $803,000 for it in 2006, so not likely the Zestimate of $937,000 is correct. Compared to the Zestimate it looks like a screaming deal…but in reality it’s about the same as SS#1…OK for an end user but not for an investor.

For those who wanted to know Original Asking Price, I don’t know how it helps you to know that was $1.4 million on a property whose value is clearly just under $800,000?  Maybe I’m missing something, but asking price is never part of my valuation for  a buyer client.

Bottom line, looking at the Zestimate AND the Cyberhomes value AND what the owner paid for it and when AND the 2008 assessed value (not 2009) and the improvements or lack thereof, tells you a lot more than “the comps” these days.  Looking at comps is dangerous, as if you go back even 4-6 months, you are looking at prices that are higher than today’s current market value.  That may change into the second quarter…but the full area trend is MUCH more important right now than what the neighbors’ homes sold for back in June or July.

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ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

28 thoughts on “What do you do with a Zillow Zestimate?

  1. Fascinating. As short sale inventory increases and with the banks’ challenges to process applications, shopping for short sales could be very time consuming. I’d imagine this system is great for increasing your productivity.

  2. David,

    Unfortunately people often look for what’s wrong with the Zestimate instead of what’s right with it. Clearly it is a valuable tool in the toolbox, particularly for consumers. Even an appraiser cannot give a number that does not have variance. This market takes everything we’ve got…and more info is always better than less.

  3. As a recent immigrant to the area, I”m not familiar with the property assessment rules. I know some areas tax on a percentage of assessed value, or report the assessed value as a percentage of the actual assessment. Looking at the King county tax records for properties, I was wondering what the actual value and tax rates were, so when I see “land 250, improvement 160”, what the property is actually valued and taxed at. Also, when were the currently published 2008 assessments and taxes calculated and published, am I looking at 6 month old data?

  4. Ardell wrote: “Bottom line, looking at the Zestimate AND the Cyberhomes value AND what the owner paid for it and when AND the 2008 assessed value (not 2009) and the improvements or lack thereof, tells you a lot more than “the comps

  5. Kary…you know what volume looks like since October. What makes you think you can find relevant comps everywhere? Not exactly massive amounts of recent sales for every neighborhood.

    I’m using a popular neighborhood in Redmond with sufficient like kind housing, to answer Mark’s comment #3.

  6. H Mark,

    I’m going to start from scratch like a consumer would, to answer your question.

    1) Google “King County Parcel Viewer” (there’s a new one BTW for those who haven’t used it lately. That will take you here:


    2) Enter the street addresses of the properties for sale in the neighborhood where you are thinking about buying.

    Shoot…I better turn this into its own post…

  7. Ardell,

    Thank you. Yes, I’m well familiar with the King county parcel viewer, and I love it (OK, the new UI front end is kind of “eh”). 🙂

    Looking forward to the complete post, thanks.

  8. Question:

    What good free websites can search for homes that have either gotten a Notice of Default or a Notice of Foreclosure (pre-foreclosure public records) or have gone to Trustee’s Sale and are now bank-owned?

  9. Mark #3,

    I will continue to respond by email vs on blog. The subject matter is too broad and too off topic, and I don’t want to go to far into real estate tax issues here on RCG. I will tell you, in your instant case as you have revealed in email…without revealing the location of the property, that to get that house at what it is “worth” today…you have to be willing to lose it.

    I will elaborate via email.

  10. I can do unlimitted Zillow Searches and save them to a spreadsheet if anyone is interested. I will do the searches and am not selling the program I have created to do it.

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