As an experienced real estate broker I have always known of the many shortcomings of automated property valuation tools such as the #2 most visited real estate website, Zillow.

Not until recently however, did I learn that by Zillow’s own statistics, Zillow’s median error rate on San Francisco “Zestimates” is 10.7 percent. This means that Zillow’s estimates are within 10.7 percent of the actual selling price half of the time!

Furthermore, Zestimates are within 10% of the actual selling price 48% of the time, and within 5% of actual selling price only 27% of the time!

I have to say, to their credit, Zillow publishes this information right on their website, but you have to read the fine print.

It is particularly frustrating for real estate professionals when we do extensive research and analysis on a property and the owner cites and (sticks to) a higher Zillow estimate — of course they don’t mention it when we come in at a higher valuation :)

Next time buyers and sellers feel compelled to check out Zillow’s Zestimates and find a discrepancy in valuations, please give us professionals a chance to explain. If you’re still not convinced, ask another Realtor for another opinion!