Published on Feb 15, 2025 5 min read

What to Do About Inaccurate Redfin and Zillow Home Value Estimates

Over the last few years, a quick way to get an idea of a home's value has been online home value estimates, which are a popular resource for both homeowners and buyers. One of the most popular platforms that provide this data is Redfin and Zillow, which makes it easier than it has ever been to get a ballpark estimate. But these values swing between helpful and frustratingly way off the mark.

These estimates are driven by automated algorithms that can miss a property's unique qualities and result in numbers that may shock or confuse the property owner. What should you do when the estimate you see doesn't match what you know when you're on the property? In this post, we dive into why these inaccuracies exist, how they can impact your decision-making, and the steps you can take to get a more accurate picture.

Why Do Redfin and Zillow Get It Wrong?

The reason for the huge difference between Redfin and Zillow home value estimates is the algorithms they have. Automated valuation models (AVMs) are used to calculate property values by these platforms. AVMs analyze public data, like how recently homes in the neighborhood sold, tax assessments, and property size examples. AVMs are fast but don't tell all of the story of a home. The model can miss entirely or undervalue renovations, custom features, or unique neighborhood characteristics, which can result in numbers that are way off of the high or low end.

Location is another tricky factor. Real estate markets can vary drastically, even from one street to the next. If the AVM doesnt have recent, relevant data from similar properties nearby, it might pull information from too broad a radius, impacting the accuracy. For instance, its not uncommon for Redfin and Zillow to pull data from a different neighborhood that doesnt share the same market dynamics, skewing the estimated value.

How Inaccurate Estimates Affect Homeowners and Buyers?

These inaccuracies can have a real impact on homeowners, buyers, and sellers. For a homeowner, seeing an undervalued estimate can feel discouraging, especially if theyve put considerable time and money into improving their property. On the flip side, an inflated estimate might give unrealistic expectations about a propertys worth, which can be disappointing when a formal appraisal reveals a lower value.

An accurate estimate can also lead to clarity and better negotiation strategies for buyers. If the listed price is significantly different from Zillows Zestimate or Redfin's value, it might raise questions about the seller's motivations or the property's actual value. This uncertainty can lead to hesitations, complicate negotiations, or make a buyer feel like they need to pay more or more.

Steps to Take if You Disagree with an Estimate

If you find that your Redfin or Zillow estimate needs to be revised, there are several approaches you can take to address it. Here's a breakdown of some actionable steps:

Check the Property Data

Sometimes, inaccuracies stem from errors in the property's basic data. Redfin and Zillow rely on public records for information like square footage, lot size, and the number of bedrooms and bathrooms. Check if this data matches your property's actual characteristics. If it does, you can often update or correct the information on these platforms. This may not result in an immediate change in the estimated value, but it does provide the AVM with better data to work from, potentially improving accuracy over time.

Consider a Comparative Market Analysis (CMA)

A comparative market analysis, or CMA, is a report prepared by a real estate agent that looks at recent sales of similar properties in your area. Unlike the AVM, an agent conducting a CMA can account for your home's unique aspects, such as recent renovations or desirable features that add value. By comparing your home with actual sales data from properties that closely match it, a CMA often provides a more precise estimate.

Request an Appraisal

If you're looking for the most accurate assessment, an appraisal may be your best bet. Appraisers are licensed professionals who conduct an in-depth evaluation of a property, considering factors that AVMs and CMAs might overlook. While appraisals come with a cost, they're often worth the investment for those serious about buying, selling, or refinancing. An appraisal gives a concrete, legally recognized estimate of your property's worth, which can serve as a reliable baseline if you're in negotiations.

Adjust for Market Trends and Seasonality

The real estate market is dynamic, and seasonal trends can also influence home values. For instance, prices may rise during peak buying seasons and stabilize or drop in slower periods. Redfin and Zillow's AVMs may only sometimes account for these subtle shifts, especially if they're based on data from a period with different market dynamics. Staying informed about the broader market and current trends can help you understand why an estimate might seem off and give you context for the fluctuations.

Consult a Local Real Estate Expert

Real estate markets can be hyper-local. A professional with years of experience in your neighborhood will likely have a nuanced understanding of the area's unique features and market quirks. An experienced agent can point out factors an algorithm won't pick up, like the appeal of a particular street or the impact of an upcoming school zoning change. Having someone with local insight can provide a reliable counterpoint to automated estimates and guide you through what might otherwise feel like an uncertain landscape.

Conclusion

Redfin and Zillow offer incredible tools for the modern homeowner or buyer, bringing a wealth of information to our fingertips. However, it's essential to remember that these estimates are flexible. Home value algorithms rely on broad data and often overlook unique characteristics that can significantly impact a property's value. By taking control of your property's information, consulting professionals, and understanding local market trends, you can gain a clearer picture of your home's true worth.