Many home buyers rely on real estate apps like Zillow and Redfin to focus their searches based on price, location, and time on market. Many sellers also rely on the apps' home value estimators to help them set a price. However, the Redfin Estimate and Zillow Zestimate aren't always accurate. Here is what you can do about it as a homeowner.
- The Redfin Estimate and Zillow Zestimate calculate a home's market value using publicly available information and user-submitted data.
- Both tools are often used by buyers when shopping for a home.
- Redfin's median error rate is 3.04% for on-market homes, while Zestimate's is 1.9%, according to the two companies.
- Neither home value estimator can or should replace a professional appraisal.
- If you believe your home's estimated value is inaccurate, you can contact the companies with updated information to correct it or sometimes fix it yourself online.
What Is the Redfin Estimate?
The Redfin Estimate is a calculation of how much an individual home is worth on the open housing market. According to Redfin, the tool is highly accurate, with a median error rate of 3.04% for on-market homes.
Redfin uses Multiple Listing Service (MLS) data on recently sold homes to determine its value estimates. The Redfin Estimate employs a proprietary algorithm that evaluates hundreds of data points about the market, specific neighborhood, and home features.
Redfin only offers estimates for homes in areas where similar properties have sold within the past year.
What Is a Zestimate Home Value?
The Zestimate is Zillow's home value estimator. Using MLS information, user-submitted data, and market trends, Zillow's proprietary algorithm generates the Zestimate.
According to Zillow, the Zestimate is highly accurate, with a median error rate of 1.9% for on-market homes and 6.9% for off-market ones.
To date, Zillow has issued Zestimates for more than 100 million homes across the country.
Factors That Affect Your Online Home Value
While Zillow and Redfin don't publicly share the specifics of how their algorithms evaluate and weight information, these are some of the factors that can come into play:
- Home Characteristics. Your home's location, square footage, number of bedrooms, and any special features—such as a pool—will affect its value.
- Length on Market. How long your home has been listed on the market and gone unsold can have a significant impact on its listed value.
- Off-Market Data. If your home isn't currently on the market, Zillow and Redfin will use tax assessments, previous sales prices, and other publicly available data to estimate its value.
- Market Trends. Redfin and Zillow home value estimates can fluctuate based on market trends. For example, seasonality can affect home prices; houses tend to sell for more in the summer and less in the winter.
Can Redfin and Zillow Home Value Estimates Replace Appraisals?
Neither Zillow's Zestimates nor the Redfin Estimate is designed to replace or serve as an appraisal. The estimates are calculated by a computer based on available data and are not the same as a professional appraisal.
Both companies encourage buyers and sellers to work with real estate agents or professional appraisers. Banks and other lenders will typically require a formal appraisal before issuing a mortgage.
The Problem With Redfin vs. Zillow Home Value Estimators
With either the Redfin Estimate or Zillow Zestimate, the estimated value of any given home is only as accurate as the available data. If your home has additions or renovations that don't show up in the data, its estimated value will not reflect those changes.
Errors do happen, so your value may also be low because of outdated or incorrect information about its previous sales prices or tax history.
What to Do If Your Home Value Is Listed Inaccurately
While the Redfin and Zillow home value estimators boast high accuracy rates, they are less reliable when it comes to homes that aren't currently on the market. They may also be using outdated information. Whichever the case, if you believe your home is worth more than Redfin or Zillow indicate, you can take the following steps to correct its estimated value:
1. Update Your Home Facts
If your home is not currently for sale, you can update facts about it online for both Redfin and Zillow. To do so, search for your home and claim it as the owner. The sites will ask verification questions before you can update the information.
Once you've been verified as the owner, you can update the home's square footage and the number of bedrooms and bathrooms. If you've recently completed renovations, such as redoing the kitchen or bathrooms, you can indicate that. You can also note if there are any special features, such as a pool, finished basement, accessibility additions, or waterfront location.
Once you've updated the information, the home value estimates will reflect the changes right away.
Note, however, that you cannot update any information if your home is currently on the market. In that case, you'll need to contact the Redfin and Zillow customer service teams.
2. Review Your Home's Tax History and Sales Prices
Your home's previous sales prices and tax history can affect its listed value. If you've made any significant changes to your home, make sure you've reported them to the tax assessor; otherwise, they won't be included in the home value.
3. Contact Customer Service if Necessary
If your home is currently on the market and you find information that's incorrect, collect whatever relevant documentation you have, such as mortgage statements, tax bills, or public records. You can submit those items for consideration by the companies' customer service departments.
The Bottom Line
Online home valuation estimator tools like Redfin Estimate and Zestimate can be useful for buyers and sellers alike, and both claim to be highly accurate. But there are some downsides to them. If you find inaccurate information about your home, you can correct it yourself or submit documentation to the companies so they can update your listing.
How Accurate Are Redfin and Zillow Home Value Estimates?
Both companies claim they are highly accurate, with a median error rate of 2.99% for on-market homes for Redfin and a 1.9% error rate for Zillow.
What Can Cause Errors in a Redfin or Zillow Home Value Estimate?
A common reason for inaccurate estimates is outdated information. For example, if you have made major additions or renovations that don't show up in the data that Redfin or Zillow have collected on your home, their estimates may be too low.
How Can I Fix an Inaccurate Redfin or Zillow Home Value Estimate?
That depends on whether your home is currently up for sale. If it is not on the market at the moment, you can correct errors or add new information on the Redfin or Zillow websites yourself. If your home is on the market, you will need to contact the Redfin or Zillow customer service teams and supply appropriate documentation to make your case.