Your Zillow Zestimate and What Your House Is Really Worth

When a seller tells me what they think their house is worth, the number often came from Zillow. I understand why. It's free, and it's right there on your phone. But when the house needs work, that number can be badly off, and leaning on it can cost you time.

So I ask one question: "When was the last time Zillow was inside your house?"

Their answer: never.

"Then how can it value your house? Zillow doesn't know if your kitchen is from the 1950s or the 2020s."

That's not a knock on Zillow. It's just what an automated estimate is.

What Zillow says the Zestimate is

You don't have to take my word for any of this. Zillow's own Zestimate page describes it as an estimate built from public records, MLS data and details that users submit, run through its valuation model. It calls the Zestimate a starting point and says plainly that it is not an appraisal and can't be used in place of one.

The same page tells owners that unreported additions, updates and remodels aren't reflected in the estimate. And it suggests supplementing the number with other research, such as visiting the home, getting a professional appraisal or asking an agent for a comparative market analysis.

In other words, the company that publishes the number expects you to check it.

Why condition is the blind spot

An algorithm works from what's on record and what's been reported, like square footage and past sales. Those facts can look identical for two houses on the same block, even when one was gutted and redone last year and the other still has its original kitchen, a tired roof and a basement that takes water.

To a model, those houses are close cousins. To a buyer walking through, they're worlds apart. The renovated one might sell for hundreds of thousands more.

The gap cuts both ways. A house that was beautifully updated without permits or without the owner telling anyone can be undervalued online. A house that hasn't been touched in fifty years can come out too high if the model leans on updated houses around it. That second case is where a seller can get hurt, by anchoring on a number no buyer will pay.

Your tax assessment isn't the answer either

You might be tempted to use the assessed value on your property tax bill as a second opinion. In New Jersey, the Division of Taxation explains that property is assessed against true market value as of October 1 of the year before the tax year, and every county has set the assessment level at 100% of that value.

In practice, assessments drift between revaluations. The Division's revaluation guide says a town needs one when properties are being assessed substantially above or below the required standard, and the state tracks each town's ratio of assessed value to market value to spot that drift. Treat the assessment as one more rough reference, not a price.

What actually sets the price

A buyer pays for the house in front of them. Plenty of what moves the number is invisible to a website:

• How old the kitchen, baths, roof and mechanical systems are.
• Water in the basement, cracks, or signs of foundation trouble.
• Electrical and plumbing that may need replacing.
• Whether past work was permitted.
• How much cleaning out or hauling the house needs.

Then you compare against houses that sold recently in a similar condition. That last part matters. Sellers often compare a dated house to a renovated one, and I walk through a full example in how investors price houses.

Better ways to check your number

If you want a real read on value, here's where I'd look:

1. Ask a local agent for a comparative market analysis. Tell them about the condition so they can adjust for it.
2. Pay for an appraisal. Zillow's own page lists it as one way to check the number, and you can ask the appraiser which sales they compared your house to.
3. Get a contractor's estimate if the house needs work, so you know what a buyer will be budgeting for.
4. Ask any cash buyer to explain their offer line by line. If they can't, that tells you something.

If your house has been sitting on the market at a Zestimate-based price, why your house isn't selling may help explain what buyers are seeing.

Where I fit in

When I make an offer, the condition of the actual house matters, not just the data about it. I buy in any condition, including fire-damaged and unlivable houses, and if your house is in good shape, I'll tell you that listing with an agent will likely get you more. If it needs serious work, our guide to selling a house that needs repairs is a good next read.

You can get a free cash offer with no obligation, or read our FAQ first. Either way, use the online estimate as a conversation starter and not the final word.