Detroit Real Estate

I had a client call me and ask me how good are Zillow estimates?  He said he just went to Zillow and the Zillow estimate on his home was $145,500.

I honestly do not know how Zillow's formula for Zillow estimates works but everytime I look at them and compare them to what the house is worth, they are usually off.  Now you have to remember Zillow doesn't see the inside of a house, or know the condition of the house.  Nor are they able to know each individual real estate market.  They can't possibly know how the metro Detroit real estate market is this month and be able to factor it into the computer generated Zestimate. 

When I pulled recent sold comparables for this Livonia home.  The two HIGHEST COMPARABLES IN THE LAST 6 MONTHS WERE $125,000 and $117,000.  So there it is almost impossible that this house can sell for much more than $125,000.  The house won't appraise for much more than that in today's market with the banks being tight on appraisals.  The Livonia home would have to sell for cash to sell much higher than $130,000.  So the true market value would be closer to $125,000 on this Livonia home.

That's a $20,000 difference.  That's a difference off being able to sell the house and not being able to sell the house for this Livonia home owner.

I think it is impossible to determine the value of a house with a computer.  It's hard even as a local Realtor to get an exact figure of what a house is worth.  Any good Realtor will usually give a range of what a house will sell for.

So my opinion is that Zillow may sometimes be able to get a good estimate in some circumstances, but I would call a Realtor when considering what to sell your house for.  I wouldn't put to much faith in some estimates.  But that is just my opinion.