• CMG MORTGAGE, INC. NMLS #1820

Zillow Invests to Improve Zestimate Technology

  • April 16, 2019

CMG Image

Zillow, a free real estate marketplace resource, has invested in improving the accuracy of its popular “Zestimate” tool.  When it launched in 2006, the price estimate feature had a margin of error of about 14%, giving some homeowners and home buyers unrealistic expectations when it came time to buy or sell.  Today, that margin of error has improved to about 4.5%.  In 2017, Zillow launched a competition to improve the accuracy of the Zestimate.  Approximately 4,000 teams of data scientists and engineers from 91 countries participated.  Zillow hopes to reduce its margin of error to 4% by the end of this year. 

The Zestimate was never intended to replace an actual home appraisal.  Even so, some disgruntled homeowners have actually filed suit against what they believed to be Zillow’s “deceptive practices.”  In response, Zillow opened up the floor for data scientists and engineers around the world to crowdsource ways to improve the accuracy of its algorithm.   The winning team, ChNJestimate, was comprised of three data scientists and engineers from Morocco, Canada, and the United States and will be awarded $1 million for their work.  The team used machine learning, as well as data like commute times and road noise to devise its algorithm. 

On its website, Zillow encourages home buyers and sellers to supplement the Zestimate with other research, including but not limited to: “getting a comparative market analysis (CMA) from a real estate agent, getting an appraisal from a professional appraisal, and visiting the house whenever possible.”  The accuracy of the Zestimate varies from location to location.  Additionally, Zillow allows homeowners to claim their property listing and edit facts like the number of bedrooms, bathrooms, and other home improvements or upgrades, that could influence the value of the property. 

Free resources like Zillow are a great place for home buyers or home sellers to start, before they move forward with a real estate transaction.  However, like any free resource, Zillow’s database is limited.  When you are buying a home, your Realtor or real estate agent will have access to listings before they go public, using the MLS.  Professional appraisers will also be able to give a more accurate appraisal of the home’s value than a listing based on data aggregation. 

If you have any questions about the value of your current home, or a home you are looking to buy, please let me know. 

 

Sources: MarketWatch, Kiplinger, Zillow

Mark Neely
Senior Loan Officer
NMLS # 489379
Branch NMLS # 1093019


Mark Neely

PHONE: (615) 567-8882
mneely@cmgfi.com

APPLY NOW MY VIDEO
CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).