We often get questions about our software as to the accuracy of the data or how our software compares to a so-called competitor (there are none really).
Well we decided to look at some similarities and differences in the Zestimate and our CompScore provided by Zillow and our service REI Autocomp.
Zillow is a a real estate life cycle website that has a feature called a Zestimate. This estimate is a proprietary algorithm of theirs and as is ours.
So although we can not tell you how they officially calculate the property value for either company, please understand that the accuracy of any evaluation is in the root data. We can express that at their own admission because the number they generate can vary in accuracy from market to market.
What we mean is that the more "data points" or in this case "sold properties" you may have when analyzing a property, the better the opportunity for accuracy.
(Note: We do no sell "sold data" as that is against the TOS of our providers, we do however sell the use of our software's algorithm, charts and instant offer features, etc.)
To further the comparison check out the chart we referenced from their website:
Statement: WITHIN 5% OF SALE PRICE:
This is the percentage of transactions in a location for which the Zestimate was within 5% of the transaction price. Nationwide, Zestimates are currently within 5% of the final sale price 38.4% of the time.
So what the above facts mean is that the Zillow Zestimate is only within 5% of the eventual sales price 38% of the time. So on a property that perhaps sold for $360,000 their Zestimate could be as low as $342k or as high as $378k. So this mean that 62% of the time the gap is LARGER.
This was unacceptable for us as investors or frankly and as homeowners. So we decided to take on the task of creating my own evaluation software with a greater accuracy then Zillow. Brave we know.
Here are some sources of where one can find data points for use in preparing a property evaluation:
Our software utilizes data from four sources currently, one of which is the Zillow API "sold data".
Another "difference" from other online evaluations is that we not only provide the current market value but also the distressed market value (what a home like the subject property sells for in distress) and the after repair value (what a home like the subject property sells for in excellent condition).
Finally we allow our users/members to create their own custom offers once they dial in the values. This allows them to create offers in seconds, not hours.
I hope this explanation was detailed enough for you and you are welcome to download a trial version today.
Randy - Creator of REI Autocomp
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