Accuracy of Zillow and other similar sites

[Cory Gibson]

Hello, All.

I’m looking to purchase my first rental property within the next 30 days. In addition to information from the realtor and county records, I find myself using Zillow as a research tool too. Can anyone shed light on the accuracy of the information, particularly the Zestimates, featured on Zillow.com? Are there other sites that I should utilize? 

Thanks, Cory

[Ray Ellen]

As a Realtor, I can tell you that Zillow is + or - 10K to 20K consistently ... So, I would say it is very inaccurate. We have access to an automated valuation system similar to what banks use to monitor their loan portfolios. It is more accurate than Zillow, but the best way is to have a full CMA done by a great Realtor who is familiar with the area. For my investors, I will do a "quick and dirty" which is a comp based on beds/baths/sqft sold within 6 months and will let them know the average $/sqft. It takes 5 minutes but provides a basis for them to know how far apart they may be. If they want more info I will do a full CMA, but that usually requires a little more work and eyes on the property to make sure it is done right.

Be careful with your "ARV"s. I see a lot of investors overestimating the ARV and underestimated the cost of repairs and that is a recipe for break even, or loss.

Good luck!