Zillow is a real estate data aggregator that provides many free tools to the public in an easy-to-use interface. It’s not surprising that many people begin the process of selling their home by using the Zestimate tool on Zillow’s website to get an approximation of what their home could sell for, based on collected data from the area.
Before getting too attached to the Zestimate you receive, you should be aware that Zillow is only meant to provide a starting point for research and it is often inaccurate. Zillow representatives admit that a Zestimate falls within five percent of the selling price, half of the time. The other half of the estimates may be off by as much as 20 percent, particularly with properties valued at over $1 million.
Though Zillow’s algorithm is fairly advanced, luxury homes have a multitude of amenities which cannot be accounted for by the software. The program cannot take into consideration anything that may add emotional appeal to the property, including: renovations, curb appeal, waterfront view, or lot size. Recorded selling prices may also include furnishings or art, which would inflate Zillow’s perceived value of the neighboring properties, further affecting your online appraisal.
In coveted areas, similar to Manalapan and Hypoluxo Island, the problem is exasperated by amenities that hold subjective values inherent to those properties. Logic would lead any reasonable person to conclude that a property with an ocean view has a higher value than an identical property with an Intracoastal view, but Zillow cannot make the distinction between the two. Similar to this example, the waterfront footage of a property respectively increases its value.
Ultimately, there isn’t a replacement for having your property professionally appraised by a local appraiser or real estate agent with experience and knowledge of the area. There isn’t a way for Zillow to have all the information necessary to make an accurate selling price prediction since many transaction details aren’t recorded. If you’re looking to sell your Palm Beach waterfront home, I’d be happy to schedule an appointment to evaluate your property.