Zestimate: What It Is, How It Works, and Why It Often Gets It Wrong

When you look up your home on Zillow, you see a number: the Zestimate, an automated estimate of a home's market value generated by Zillow using public data and algorithms. Also known as automated valuation model, it’s meant to give you a quick snapshot of what your house might sell for. But it’s not a professional appraisal, and it’s not always close to reality. Many people treat it like gospel—until they list their home and realize the offer is $50,000 lower than the Zestimate. That’s because it doesn’t walk through your house, see your renovated kitchen, or notice the cracked foundation in the basement. It just crunches numbers from tax records, past sales in your neighborhood, and square footage estimates that might be off by 20%.

Zestimate relies on public records, government data like property tax assessments, deed transfers, and building permits, which are often outdated or incomplete. A home that was remodeled last year might still show up in the system with its 1990s kitchen. Meanwhile, comparable sales, recently sold homes used to benchmark value in your area might be from six months ago—long before interest rates jumped or a new highway opened nearby. Zillow’s algorithm can’t tell if your neighbor’s house sold for less because it had a bad roof, or if your house is worth more because you added a sunroom that wasn’t permitted. It doesn’t know your neighborhood’s reputation changed because of a new school or a rise in crime.

And it’s not just homeowners who get fooled. Buyers use Zestimate to make offers, sometimes overpaying because they trust the number. Sellers rely on it to set their asking price, only to find their home sits for months because the price is unrealistic. Real estate agents know this. They use Zestimate as a starting point, not the final word. A good agent pulls recent closed sales, checks for pending listings, walks the property, and talks to neighbors. That’s how you get a real value—not a computer guess.

The truth? Zestimate is useful for a rough idea—if you know its limits. It’s great for seeing trends over time: is your neighborhood going up or down? But if you’re planning to buy, sell, or refinance, you need more than a number on a screen. You need someone who’s seen your street, knows your house, and understands what buyers are willing to pay right now. The posts below break down exactly how Zestimate works behind the scenes, when it’s dangerously wrong, and what tools and methods real pros use instead. You’ll find real stories from people who trusted Zillow and got burned—and how to avoid the same mistake.