When buying or selling a home in Texas, one of the most important steps is determining the accurate market value of your property. For your home value estimates, when you turn to the internet, two names, particularly, stand out: Zillow and Realtor.com. But which is more accurate: Realtor or Zillow? And do you think it can replace a real-time professional and local real estate expert?
Through this blog, let’s dive into the data behind both platforms, how their algorithms work, compare them with professional realtor insights, and help you, as a seller, decide the most trustworthy one while making one of the biggest financial decisions of your life.
Zillow Zestimates
Zillow is a popular real estate home valuation platform in the USA due to its home valuation tool called ‘Zestimate’. Zestimates is a proprietary algorithm that estimates the market value of homes using publicly available data, user-submitted data, and the MLS database, wherever available.
However, should you use Zillow for your home evaluation as a homebuyer or seller? Let’s go through its pros and cons and then decide:
Pros
- Instant estimates of millions of homes.
- User-friendly interface.
- Frequently updated data.
Cons
- It relies on the automated data
- May provide inaccurate information in non-disclosure states like Texas
- Unable to account for conditions and upgrades of homes
The median error rates according to Zillow are about 2.4%, however, the number rises for the off-market properties. In Texas, if the home prices of the real estate listings are not mentioned or disclosed, it can mean missing tens of thousands of dollars.
Zillow Premier Agent Program
Zillow also offers the Zillow Premier Agent Program, helpful for real estate lead generation. It is like an online real estate marketplace that connects potential buyers and sellers with local professional real estate agents and brokers offering personalized insights, comparable sales, and guidance that goes beyond the algorithm. This active real estate marketplace offers potential clients, including home buyers and sellers, direct access to highly accurate and up-to-date property prices, real estate listings, and experts like Nitin Kumar who understand the nuances of specific neighborhoods, current market conditions, and property-specific factors that affect a home’s value.
Realtor.com
Realtor.com also provides information and home valuations based on aggregate data from MLS sources and public records like Zillow. They are affiliated with the National Association of Realtors (NAR), which lends credibility and access to agent-backed data.
But how effective is Realtor.com? Let’s look at its pros and cons.
Pros
- Pulls data from MLS feeds
- Updated often, frequently with realtor listings
- Provides sale price variation range estimates from low to high.
Cons
- Uses algorithms, as a result, not able to evaluate the condition and features of homes
- Estimates can lag behind the market shifts.
Realtor.com leads to more updated MLS data than Zillow, but its accuracy can still be questioned based on geography, data availability, mortgages, and the real estate market dynamics.
Zillow vs Realtor: Which One is More Accurate?
Money.com’s report 2021 has compared the data across three real estate websites of home valuation, i.e., Zillow, Redfin, and Realtor.com. This is what they have derived:
- Zillow:Zillow offers updated and quick data, but is off by more than 5% in 40% of home reviews.
- Realtor.com: Realtor.com offers estimates close to MLS data however, it lacks consistency throughout the search.
- Redfin: It was the most accurate, but only in metro areas where it has access to MLS data sources fully.
As a result, you can see that none of the platforms are perfect; they’re just designed to offer a starting point.
Why Automated Valuation Models Fall Short
As you know until now that both the online real estate platforms, i.e., Zillow and Realtor, rely on an AVM that pulls values from large data sets to estimate home values. It has already done exceptionally for buyers and sellers, but it is unable to:
- Evaluate the interior conditions for a house.
- Account for the recent renovations.
- Consider the neighborhood appeal of the property listings.
- React to the volatile market trends instantly.
That is why they cannot be relied on in the fast-changing areas or rural areas for home buyers, which are common in Texas.
A Realtor is Still the Gold Standard
No matter how many technologies you line up, it can never beat the real insight of your local premier agent. A realtor is able to:
- Conduct a CMA or a comparative Market Analysis.
- Factor in the hyper-local, recent sales data.
- Evaluate upgrades, the wear and tear, and staging of the house.
- Navigate the buyer’s behavior in the specific neighborhood.
For instance, Nitin Kumar, a Texas-based realtor with several years of experience in DFW real estate, outperforms the automated estimates almost regularly by pinpointing the pricing based on his hands-on evaluation. His clients mostly rely on home evaluation automations as a starting point and then on his expert intuitions for a well-informed decision.
Real-Time Example: The Price Gap
For instance, you are a Texas homeowner who lives in Austin. You have recently compared the Zestimate price, which is $525K, with the Realtor.com estimate of $510K. You are in a dilemma of which one to trust. You bring in a real estate professional for an in-person CMA and get an accurate understanding of the listing platforms and the home’s value. Turns out that the actual market value of your house came in at about $545K based on the recent upgrades and comparable neighborhood sales.
As a result, your house is sold in three days for the exact asking price. This illustration shows how AVMs can fall short in a hot or nuanced market and how a local real estate agent or a realtor can come to the rescue!
If you are thinking of selling your property, don’t miss our companion guide: Get to Know How to Properly Price Your Home for Selling it Successfully
When to Trust the Online Home Valuation Platforms
Before you dive into Zillow or Realtor, you must be informed of all the consequences and opportunities that you will be getting throughout the way.
You should trust these tools for:
- Getting started in your buying or selling of a home.
- Wanting to ballpark idea of property values.
- Comparing the large datasets in metro areas.
You ought not rely only on them when:
- You are putting a price on your home to sell.
- You are buying a house or a property in a fluctuating and volatile market.
- You have made renovations or major upgrades in your house.
Conclusion
So, which is more accurate: Zillow or Realtor? Between the home valuation websites, Realtor has an edge in stronger ties with the MLS data, but neither compares to the local realtor’s insight. Especially, if you research the Texas market, where prices shift from block to block.
But if you are serious about buying or selling a property, you should start your journey by using the online tools first. They can help feed your curiosity and early research. However, they cannot be a substitute for your local real estate agent.
Looking to sell or buy a property in Texas and don’t know where to start? We provide professional insights. Reach out to us here and let us help you make a confident decision in today’s competitive market.
Frequently Asked Questions
Q. Which is better, Zillow or Realtor?
A: Realtor is generally more accurate than Zillow due to access to MLS data, but they both have their own limitations. The most accurate data is still provided by your local real estate agent.
Q. Is there a better site than Zillow?
A: Some netizens find Redfin or Realtor more accurate than Zillow in metro areas. However, their accuracy must still be checked by a professional in the field.
Q. Is realtor.com’s real estimate accurate?
A: It is accurate to some extent, especially in a market where they have direct access to the MLS data. However, you need to keep in mind that it is unable to assess the condition and recent upgrades of the properties listed.
