Are you a real estate investor in the US looking for an alternative to Zillow Zestimate? Keep reading to discover what to use instead of Zillow.
Table of Contents
- What Is Zillow?
- What Is Zillow Zestimate?
- How Zillow Zestimate Works
- How Accurate Is Zillow Zestimate?
- The Best Alternative to Zillow Zestimate
If you’ve ever gone house hunting, you are likely to have visited the popular real estate website Zillow. Along with its massive database of property listings is an algorithm-powered tool that calculates the worth of houses around the US. However, establishing the worth of a house is more complicated than a few mouse clicks.
In this article, we will explore what Zillow Zestimate is, how it works, and if there’s a better alternative. But first, here’s a recap:
What Is Zillow?
Zillow is one of, if not the biggest real estate marketplace in the US. It assists property owners and agents in selling their homes and provides a diverse range of goods and services to both home buyers and sellers.
Zillow began as a media corporation that depended on advertising money. Now, Zillow matches prospective buyers and sellers to local realtors and mortgage lenders. It offers consumer-focused information for buyers, renters, and sellers. Agents may market themselves on Zillow, reaching thousands of prospective clients.
Zillow is a huge property marketplace in the United States, with over 40 million monthly visitors. It offers its consumers end-to-end solutions for selling homes, buying, renting, or financing. Listing your property on Zillow for sale may be a terrific method to reach more buyers.
What Is Zillow Zestimate?
This is Zillow’s unique home assessment tool, which can provide an online approximation of the value of most properties in the United States. It is based on the MLS, and its accuracy is determined by the amount of data that is publicly available. Some residences, for example, could have an unclear number of bedrooms, limiting Zillow’s home value on that property.
Zestimate’s concept is straightforward. It exists to assist house sellers in determining the worth of their homes and to assist buyers in determining if the property they want to buy is a good deal.
Related: Zillow Market Data—How Investors Can Use It for Their Market Research
How Zillow Zestimate Works
To calculate a Zestimate, Zillow utilizes a complex neural network-based algorithm. It integrates data and tax assessment records as well as direct inputs from hundreds of multiple listing agencies. The Zestimate algorithm was recently upgraded by Zillow to include new improvements.
Neural networks are AI-powered systems that mimic the operation of the human brain. It can efficiently chart massive amounts of data by connecting inputs and exploiting the links generated to produce or anticipate an output. The neural network model of the algorithm links house features, locality, real estate market trends, and home prices.
However, Zillow does not physically come to inspect your home. It can’t know if you’ve made any renovations to the property. It also has no idea if your neighbor’s house is in bad shape or what shape your house is in right now. This is unfortunate since all of these factors contribute to your home’s true market worth.
Related: Appraisal Value vs. Market Value—What’s the Difference?
How Accurate Is Zillow Zestimate?
Many users place their trust in Zillow.com’s Zestimate. However, Zestimates are not very accurate.
Zillow claims that its algorithm, which estimates the worth of over 100 million houses by assessing dozens of factors, is not to blame. A representative stated that the company is still confident in the capabilities of its Zestimate, noting the system’s typical mistake rate of 1.9% and 6.9% for on-market and off-market homes respectively.
Zillow never promises to be completely accurate. If all of the properties close to one another are similar, a Zillow Zestimate accuracy will be around 10% higher because there aren’t enough distinctive differences to throw it off. In older communities with several properties that have already been modified in various ways, the estimates will be far from close.
For the time being, Zillow cannot tell how a buyer would feel or think immediately after they visit a property. It cannot tell you if the inside has been upgraded, whether the construction is exceptional, or whether they used top-quality materials to build the house. When real estate brokers and appraisers know the community and have personally inspected the home, a different home value estimator can be used to value the property.
It’s critical to remember that Zestimate’s estimations are as precise as the data from which they’re obtained. This means that the accuracy of Zillow’s algorithm will be heavily reliant on the volume of information it gets and on ensuring that the house has similar features to its comparable residences.
Zillow Zestimate’s Blunders
In 2016, the co-founder of Zillow, Spencer Rascoff, sold his house 40 percent below its Zestimate home value.
Then in the following year, a woman filed a complaint against Zillow, saying the company’s Zestimate tool continually devalued her property, which prevented her from selling it. Zillow’s defense was that its estimates should be seen as appraisals since they only provide market value. The woman then argued that Zillow should be licensed to make assessments before presenting estimates and should get the homeowner’s approval before putting them online.
When Zillow began acquiring houses over market rates that were largely dependent on the Zestimate algorithm, it discovered that the numbers did not hold up. Nine out of 10 residences that Zillow purchased were resold at a lower price than when the business purchased them. If all of those houses sold at the asking price on Zillow, the firm would have lost $6.3 million.
Therefore, to answer the question, is Zillow Zestimate accurate? If there isn’t much information from the multiple sources Zillow uses to get data, you’re likely to encounter a severely erroneous number.
The Best Alternative to Zillow Zestimate
You have just discovered exactly what Zillow Zestimate is and how it works, including many of its pitfalls and challenges, and that it’s not a hundred percent accurate. Having discovered all of these, below is the best alternative method of determining a property’s market value.
The best alternative to Zillow Zestimate is Mashvisor.
What Is Mashvisor?
Mashvisor is a data analytics tool for better real estate investing. It is intended to assist real estate investors in acquiring suitable investment properties. It accomplishes this in two ways: first, it finds possible excellent partnerships, and then it uses data to anticipate their success on multiple types of leases.
Mashvisor made its debut in 2014 and quickly became popular because it was the only resource accessible to property investors at the time. Mashvisor was one of the platforms to provide data about investment properties to the public. All property investors, whether skilled or inexperienced, could now get access to data because of Mashvisor.
Mashvisor allows you to look for investment homes in any city of your choice in the United States. It also provides property listings from multiple reliable listing agencies. This makes the data it provides more accurate than Zillow Zestimate home values. Mashvisor also provides in-depth information on how to invest in real estate.
Why Should You Use Mashvisor Over Zillow Zestimate?
Apart from the incredible benefits and features that you will soon discover, here are two major reasons why you should consider Mashvisor over Zillow Zestimates.
Increasing Rental Income
It is impossible to accurately compute the best price to rent out your homes without appropriate market data. Mashvisor gathers all of the critical data elements needed to establish the best and more accurate prices for your investment properties.
Furthermore, you could see at a glance how much you might earn. Mashvisor computes rent for all types of rental strategies. Because not everybody wants an Airbnb, this data provides a valuable difference.
Understanding Local Markets
Understanding local markets is vital if you want to know the best ways to price your investment properties and whether you should buy in a specific location or not.
Mashvisor offers a wealth of market information. You may navigate across neighborhoods using its map and select the homes to see all of the important statistics.
You can then narrow down your search to best suit your needs and preferences.
Features and Benefits of Mashvisor
Below are the key features and benefits of Mashvisor that show you why it is the best alternative to Zillow Zestimate:
1. Heat Map
The heat map is one of the most practical and effective tools you will encounter throughout your initial search when you use Mashvisor. It’s a blueprint of the region you’ve chosen, with pins indicating available properties. You may switch between multiple properties and you will be updated by the heat map to show you the appropriate properties.
The investment properties may be sorted by:
- Cash on cash return
- Capitalization rate
- Number of bedrooms and bathrooms
- Year of construction
- Square footage
- Rental rate
- Property type
You could also filter your search to only display foreclosures and pending listings. This tool also lets you narrow down your search to locate the best home for your specific needs without having to sift through thousands of listings.
3. Faster Search Process
The platform’s artificial intelligence allows it to substantially reduce the time required to investigate an area. Instead of taking hours or even days, you can cut the procedure down to as little as 15 minutes.
Time is an important aspect when searching for an investment property. If it takes too much time to find a property that suits you, it might already be too late. That is why Mashvisor’s speed in finding the best property for you is extremely important for any real estate investor.
4. Accurate Results
We have discussed previously that Zillow home values are not a hundred percent accurate. This is not what you want when thousands or even millions of dollars are at stake. This is another aspect where Mashvisor is the best alternative to Zillow Zestimate.
You can be confident in the veracity of the results you receive from Mashvisor because they are obtained from certified sites with accurate data. The portal also assists customers in making educated selections by offering area statistics like the occupancy rate of Airbnbs, the price of the property, and the return on investment.
5. Instant Alerts
You may register online to get search notifications, which will email you the most recent listings that meet your criteria. You will save more time this way instead of searching for homes yourself, and it only takes a click of a button.
6. Custom Information
When you request specific statistics on the Mashvisor platform, you can specify the sort of investment you’re interested in and receive data tailored to that exact purpose.
In other words, you may choose between individual and institutional investment alternatives. Then based on the instant alert benefit already mentioned above, you can set an email alert that will let you know when the property you want is available.
7. In-Depth Analytics
Once you’ve selected a property, you’ll have access to the most useful aspect of the Mashvisor experience: in-depth data about the listing. This feature offers a few analytics categories that provide essential overall property value data for you as a real estate investor.
Learn More: The Best Comparative Market Analysis Tools for Beginner Investors
As an investor based in the US, it’s best to use Mashvisor over Zillow Zestimate. The information above should prove why this is a good choice. Having chosen Mashvisor over Zillow Zestimate, you can discover how to find a profitable rental property using Mashvisor by doing the following:
The first thing you should do is choose a real estate market. A quick search on Mashvisor’s blog will show you the best places to buy rental property. Next, perform a quick neighborhood analysis. All you have to do is browse for the city in which you wish to invest, and Mashvisor will show you a map of several areas with investment homes for sale.
After that, find an investment property. Mashvisor will help you in this area with its Property Finder tool. With this tool, you can perform searches based on your specific preference. Finally, perform investment property analysis and comparative market analysis. This ensures that the property you are buying is within its market value and can provide a good return on investment.
Click here to start your 7-day free trial with Mashvisor.