Zestimate Guesstimate

MissedAccording to Zillow’s own research, Zillow’s median margin of error in Iowa is 5.8%. This doesn’t sound like much until one thinks through this statistic. The median, by definition, is that one half of the homes will sell outside the 5.8% range. What does this look like in practice? The average sales price of a home in Ames is approximately $200,000. Lets assume for example that Zilow’s Zestimate for a residential home is $200,000. According to Zillow, there is a 50% chance that the sales price will be between $188,400 and $211,600. The total range is $23,200. Conversely, Zillow acknowledges that their Zestimate has a 50% chance of being wrong by more than 5.8%. It is equally likely that the actual sales price might be outside their stated range. Therefore the actual sales price could easily be $185,000 as it might be $215,000? Who knows? We know!! What confidence can this Zestimate give a home seller or a home buyer? By Zillow’s own admission, this is precisely why a Hunziker & Associates Realtor is required. We know the market.

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