Best of 2015: Discussing the Zestimate in Your Listing Presentation

We're continuing an annual tradition of counting down our top 10 articles of the year. The following article was originally published back in April and is #7 in our countdown. See #8 here.

As a real estate agent, you understand plenty about the real estate market. One of the more awkward experiences that you can have is discussing the Zestimate in a listing presentation. The best way to discuss the Zestimate is to go in prepared. It is likely that your prospect has already looked at the Zestimate or discussed it with another REALTOR® or a friend anyway.

Step 1: Getting Prepared

Although it seems pretty logical, many real estate agents do not take the time to look up the Zestimate of the subject property before going on the listing appointment. You should. The Zestimate on an unlisted home is a published price opinion. It factors into the opinion of value on a property. You may even begin by asking the sellers what they think of the Zestimate price as a way to open the pricing discussion.

Step 2: Explaining the Zestimate

The Zestimate is the efforts of savvy mathematicians to crunch together a bunch of information about property to predict home values and home value trends. The subject property is a data point. There are two considerations of value. The sales happening around the home and the attributes of the property like the size of the lot, the square footage of the house, the year it was constructed, number of beds, baths, garages, etc.

Step 3: Zestimate Accuracy in Your Area

Zillow is very transparent about the accuracy of their data. If you click on the Zestimate, there is a link to view the accuracy at the county level. Click the state then select the county. In Alabama, the Zestimate is only accurate to within 5% of the of the property value 1 in 4 times. 40% of the time, it is not accurate to within 20% of the property value. Some counties are better than others. A lot depends on the data quality, the property type, and the churn of properties for sale. More data equals greater accuracy.

Step 4: Compare the Estimates on Comparable Homes

Compare estimates on similar properties that are listed or recently sold in the area. Cloud CMA is one of the unique products that actually pulls the Zestimate into the CMA for this purpose. Agents can turn this feature off if they do not want it. But as you can see from the illustration below, properties in this market are typically listed above the Zestimate.

Cloud CMA's "What's My Home Worth?" landing pages also pull in Zestimates. For more information, see the video below:

Further Reading

• AVMs and the Weather Forecast
• Why Consumers Love Zillow
• Make Home Valuation Systems Work to Your Advantage