Today, the real estate blog Curbed is reporting the Zillow Group’s CEO Spencer Rascoff recently sold his home in Seattle and purchased a new one Los Angeles Brentwood neighborhood (yes, THAT Brentwood). What makes this newsworthy is that Rascoff’s Zillow is the site that assigns a “Zestimate” price to almost every listing on their site. The Zestimate is a computer-generated price assigned to a property based on the sales of neighboring properties.
Every quarter, Zillow releases a report on the accuracy of the Zestimate, which I have opined on before. However, Rascoff’s own sales become a great examples of how off any automated value can be.
For the sale of his Seattle home, the Zestimate was $1.75 million however the home only sold for $1.1 million. That’s 37% less than the Zestimate figure or $650,000 less. On his purchase in Brentwood, the Zestimate was off by a little more than to $1 Million. To be fair, Trulia’s (also owned by Zillow) value was off by $14 million and the site Redfin was over by a little more than $2 million.
Zestimates and other automated tools like them are great tools to give you a general idea of what a property might be worth. However, a Realtor with market knowledge and experience in a neighborhood is still a better source for property values.