There are a number of online home value estimators that sellers can use to find out what their home is worth. Two of the most popular options are Zillow’s home value tool and Redfin’s home value estimator. Having access to multiple tools begs the question: is one service better than the other and if so, why? Read on to find out.
First, Some Similarities:
Both Redfin and Zillow have databases of millions of homes all around the United States. Both companies get much of their information from public real estate records, and each company uses multiple listing agencies to gather data.
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Now, Some Differences:
- Number of Estimates:
Redfin provides estimates for more than 40 million homes in 35 different metro areas. By contrast, Zillow provides estimates for 100-115 million homes all across the United States.
- Home Prices:
Redfin is less likely to provide home values for real estate appraised at more than $2 million. Zillow has appraised a larger number of expensive homes.
Margin of Error:
Each company also has an estimate of their own accuracy: Redfin claims their estimates for active homes on the market are within 1.96% of being an accurate estimate, and off-market homes are within 6.23%. Zillow claims that its estimates have an error of not greater than 7.9% on any home. Why the difference?
- First, Zillow doesn’t provide different accuracy metrics for on-market, and off-market homes like Redfin does. That means their margin of error has to be higher so it can account for actively listed homes as well as properties that haven’t been sold in years.
- Because of the smaller number of listings available, Redfin can look at more details than Zillow. For example, Redfin may consider that a home has a stunning view that gives it a better value, and Zillow may not.
- ZIllow provides estimates for more homes than Redfin does. The more homes the system looks at, the more difficult it is for the pricing algorithm to calculate all the detailed variables that impact value in different parts of the country. For example, in some parts of the country, a home without a basement is no big deal. In other locations, a basement is a must and not having one will negatively impact the home’s value.
So which one is better? They are both great tools. Redfin is more likely to give you better accuracy, but there’s a chance you can’t find your home on their site. Zillow, on the other hand, provides more detail to help you understand local market trends, the home’s history and the impact of the surrounding area on the home’s value.
The bottom line is, you should take the time to use both tools and determine what the average value of your home is. Doing so will give you the most accurate results overall.