According to the National Association of Realtors, the median price of an existing home sold in April was $414,000. Of course, home prices vary from state to state, city to city and even neighborhood to neighborhood — sometimes, similar homes on the same block sell for very different prices. So if you’re thinking about buying or selling a home, how do you know if you’re paying a reasonable amount for the purchase, or listing your property at the right price?
Online resources seem to make this an easy question to answer: All the leading real estate websites show property values on millions of homes across the country. But how accurate are these prices? And how can a typical homebuyer or seller know for sure?
Changing the game: AVMs and the birth of the Zestimate
Zillow launched the Zestimate in 2006, dramatically changing the landscape for consumers who wanted to know what their home was worth, or what they might expect to pay for a property they were interested in. Prior to this, consumers relied almost exclusively on real estate agents to determine home prices. And while Zillow wasn’t the first company to offer online home valuations, it was the first to offer them for free, instantly and on a national scale.
According to Zillow’s website, a Zestimate is an estimate of a home’s market value that “incorporates public, MLS and user-submitted data into Zillow’s proprietary formula.” It also takes into account “home facts, location and market trends.”…