If you’re in the process of buying or selling a home, you’ve probably come across two terms: Zestimate and appraisal. While both of these terms are used to estimate the value of a property, they are not the same thing. In this article, we will explain the difference between Zestimate vs Appraisal and help you determine which one to trust when buying or selling a home.
Introduction
When it comes to determining the value of a property, there are different methods that can be used. Two of the most common methods are Zestimate and appraisal. Zestimate is a free online tool that estimates the value of a property based on public data and algorithms. On the other hand, appraisal is a professional evaluation of a property’s value done by a licensed appraiser.
Zestimate Overview
Zestimate is a free online tool developed by Zillow that uses public data and algorithms to estimate the value of a property. Zestimate takes into account factors such as location, size, and recent sales data to estimate the value of a property. While Zestimate is a useful tool to get a general idea of a property’s value, it should not be used as a substitute for an appraisal.
Appraisal Overview
An appraisal is a professional evaluation of a property’s value done by a licensed appraiser. Appraisals are typically required by lenders when buying or refinancing a home. An appraiser will visit the property and take into account factors such as location, size, condition, and recent sales data to determine the value of the property.
Zestimate vs Appraisal: Differences
While both Zestimate and appraisal are used to estimate the value of a property, there are some key differences between them:
Methodology
Zestimate uses public data and algorithms to estimate the value of a property, while appraisal is a professional evaluation done by a licensed appraiser who physically inspects the property.
Accuracy and Reliability
Zestimate can be inaccurate and unreliable, as it relies on public data and algorithms that may not take into account the specific features and condition of a property. On the other hand, appraisal is done by a licensed professional who has expertise in evaluating the value of a property, making it a more accurate and reliable method.
Cost
Zestimate is a free online tool, while appraisal can cost several hundred dollars, depending on the location and complexity of the property.
Pros and Cons
Here are some pros and cons of Zestimate vs Appraisal:
Zestimate Pros:
- Free to use
- Quick and easy to obtain
- Provides a general idea of a property’s value
Zestimate Cons:
- Can be inaccurate and unreliable
- Does not take into account the specific features and condition of a property
- Not a substitute for an appraisal
Appraisal Pros:
- Done by a licensed professional with expertise in evaluating property value
- More accurate and reliable than Zestimate
- Required by lenders when buying or refinancing a home
Appraisal Cons:
- Can be expensive
- Takes longer to obtain than Zestimate
- Requires physical inspection of the property
Which One to Trust?
When buying or selling a home, it’s important to have an accurate estimate of the property’s value. While Zestimate can be a useful tool to get a general idea of a property’s value, it should not be used as a substitute for an appraisal. Appraisal is a more accurate and reliable method of determining a property’s value, as it takes into account the specific features and condition of the property.
If you are buying or refinancing a home, your lender will require an appraisal to ensure that the property’s value is sufficient to cover the loan amount. In addition, if you are selling a home, an appraisal can help you determine a fair asking price.
While Zestimate can be a useful tool to get a general idea of a property’s value, it should be taken with a grain of salt. Zestimate may not take into account the specific features and condition of a property, which can lead to inaccurate and unreliable estimates. If you’re relying on Zestimate to determine the value of a property, it’s important to also get an appraisal to ensure that the estimate is accurate and reliable.
Frequently Asked Questions (FAQs)
Can Zestimate be trusted?
Zestimate can provide a general idea of a property’s value, but it should not be used as a substitute for an appraisal. Zestimate can be inaccurate and unreliable, as it relies on public data and algorithms that may not take into account the specific features and condition of a property.
How accurate are appraisals?
Appraisals are done by licensed professionals who have expertise in evaluating property value. While appraisals can be influenced by factors such as market conditions and the appraiser’s experience, they are generally considered to be more accurate and reliable than Zestimate.
How much does an appraisal cost?
The cost of an appraisal can vary depending on the location and complexity of the property. Appraisals can cost several hundred dollars or more.
When is an appraisal required?
An appraisal is typically required by lenders when buying or refinancing a home to ensure that the property’s value is sufficient to cover the loan amount.
Can I use Zestimate to determine the value of my home when selling it?
While Zestimate can be a useful tool to get a general idea of a property’s value, it should not be relied on as the sole method of determining a property’s value when selling it. It’s important to get an appraisal to ensure that the estimate is accurate and reliable.
Conclusion
In conclusion, while both Zestimate and appraisal are used to estimate the value of a property, they are not the same thing. Zestimate is a free online tool that uses public data and algorithms to estimate the value of a property, while appraisal is a professional evaluation done by a licensed appraiser who physically inspects the property.
While Zestimate can be a useful tool to get a general idea of a property’s value, it should not be used as a substitute for an appraisal. Appraisal is a more accurate and reliable method of determining a property’s value, as it takes into account the specific features and condition of the property. If you’re buying or selling a home, it’s important to get an appraisal to ensure that the estimate is accurate and reliable.
