General Question

elbanditoroso's avatar

Why does Redfin show a house value of $22K less than Zillow for my house?

Asked by elbanditoroso (30461points) 1 week ago

It’s hard to know which is correct. Zillow seems hight, but Redfin seems low and their photo is 14 years out of date.

Aside from paying for an appraisal, what’s a good way to guestimate the value of my house?

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6 Answers

JLoon's avatar

I’ve been selling real estate part time for over 3 years now. Your question is a lot like what I, and other agents keep hearing from sellers and buyers all the time.

There are many reasons why the two companies estimates for the same properties don’t often match (and are sometimes ridiculous compared to an actual sales price). So it’s complicated but comes down to this :

• Both Zillow & Redfin have access to Mulitiple Listing Service (MLS) data, but that info is based on reported sales figures for generally similar properties within the same geographic area. If your home is not typical of other homes in your neighborhood, or if nothing in your area has sold in over a year, MLS data can be inaccurate when it comes to a realistic valuation.

• After getting the MLS stuff, each company uses it in a different way and for different purposes. Both have proprietary computerized algorythms that sort MLS info along with other factors they choose according to their own priorities. The biggest difference may be that Redfin is a full service nationwide real estate brokerage that uses there estimates to support their business with buyers & sellers. Zillow is not invloved in direct sales, and foucuses entirely on data analysis as it’s primary business.

• Zillow provides estimates on about 11O mil homes nationwide, while Redfin covers roughly 74.5 mil. Over the past year Redfin claims their estimates have had an erorr rate of approximately 3%, while Zillow says they’re wrong 1.9% of the time.

• Overall what local agents unafilliated with either company usually see when comparing actual closing sales in their markets is that Redfin estimates tend to be low, while Zestimates are generally on the high side. The biggest factor in the difference is that most homes in both company databases have been off the market for more than 5 years.

Bottom line is be realistic, and work with a local realtor who actually knows the market in your area, and will take time to learn what the value of your poperty should be.

elbanditoroso's avatar

@JLoon thanks for the explanation. Only one house on this street sold in the last 2 years (although plenty in a 1 mile radius) so there may simply not be enough fresh data to work with.

I’m not thinking about selling, but I keep getting solicitations from realtors and I’m curious what I could get. But no curious enough to talk to them.

JLoon's avatar

@elbanditoroso – Those cold calls are probably coming from new realtors in big agencies who follow the Redfin & Zillow estimates like some kind of stock market ticker. They’re hungry but often lack experience.

If and when you do decide to sell remember to take your time choosing who you list with. Right now typical commission for a real estate agent who knows anything is about 5%. Redfin is giving their people less 1.7% on average, and there are other other companies trying to go even lower.

But like everything else, you usually get what you pay for. Good luck.

kritiper's avatar

I get lots of realtors asking about my house, too. I check with the local property tax people for an estimate. Also, other houses on my block, if there are any. I’m not planning to sell but it’s interesting to consider what the house would bring.

YARNLADY's avatar

House prices are going crazy right now. I look at “sold” houses in my neighborhood daily. Two relatively equal houses on the same street sold for $50,000 difference. I had looked at both of them, and there was nothing special about the more expensive one.

JLeslie's avatar

The market is crazy right now. The two sites probably use different comps when there is nothing in the immediate neighborhood, plus might also be forecasting sales trends at a different rate.

I’m not sure if either takes into account sales not through the mls? That would mean pulling sales info from county property records.

When Zillow first became popular we realtors hated it because people thought houses should be worth what Zillow said, but it can be way off.

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