The Redfin estimator is one of the most accurate home value estimators, with a national median error rate of 1.98% for on-market homes and 7.72% for off-market homes.[1] It's slightly less accurate than Zillow, which has a median error rate of 1.94% for listed homes and 7.06% for off-market homes.[2]
Redfin's estimates cover nearly 100 million homes across the U.S. They're updated daily for homes for sale and weekly for those off the market. The company says it uses over 500 data points about the home, the neighborhood, and the market to determine value. But even with this data, its estimates can be off by thousands of dollars.
“These tools are just automated guesses," says Matthias John, a Realtor based in Charlottesville, VA. "They haven’t walked through your house, they don’t know what kind of work you’ve put in (or haven’t), and they don’t account for things like an incredible view, awkward layout, or a crumbling driveway.”
If you're setting a list price, experts recommend getting a free comparative market analysis (CMA) - a detailed report that compares your home to similar recently sold properties to determine its value - from a local realtor.
» Ready to get your home value? Request a free CMA report from an experienced local realtor
When should I use a Redfin estimate?
Free online estimators like Redfin are useful when considering buying or selling and are in the initial phase of estimating a home's worth. These estimators can be a starting point for setting a list price or determining how much to offer on a home.
To get the most out of these tools, compare Redfin with other estimators like the Zillow Zestimate and the Chase home value estimator.
But experts agree that you shouldn't rely only on online home value estimators when making major financial decisions. “The bottom line is for a homeowner to recognize that an AVM is only a statistical model and the accuracy can vary," says Mark Cassidy, Chief Valuation Officer at Service 1st, a national appraisal management company.
A CMA is performed by a licensed Realtor, and they "visually inspect the subject property and compare it to sales they feel are similar to the subject property," Cassidy explains.
A realtor also considers factors (like recent renovations) that an online estimator doesn't. With a CMA, you can set a competitive listing price and get more money for your home.
How accurate are Redfin estimates?
Redfin claims it has a national median error rate of 1.98% for on-market homes and 7.72% for off-market homes.
To put this in perspective, if a home is worth $500,000 and the Redfin estimate is off by 7.72%, that means the estimate is off by more than $35,000!
However, accuracy depends heavily on the property type and location. "Specific brand AVM accuracy can vary greatly by location and property type… like remote location homes with acreage sites versus urban condominiums," says Cassidy.
Consider these other factors about Redfin's accuracy rates:
- Redfin's error rates are national rates, which means Redfin's error rates can be significantly higher in areas where it doesn't have as much data. For example, Maine has an off-market error rate of 12.89%.[3] The state has more rural areas and less home sales for Redfin to consider in its estimates.
- The error rates are also medians. That means for off-market homes, Redfin is within 7.72% of a home's sale price half of the time. The other half of the time, Redfin could be less accurate than 7.72%. An average considers large outliers (like a home that’s off by 50%), but a median doesn't.
- Estimates are more accurate for homes with very similar surrounding properties. If your property is unique or in an area with few houses, you may be in the 50% of estimates that isn’t particularly close.
- Estimates are more accurate for homes listed for sale. This is probably because the estimator takes the listing price into account, which a professional agent or appraiser likely determined. For homes that aren't listed for sale, the algorithm isn't accurate enough to rely on for setting a list price.
Redfin admits that its home value estimator should serve as a starting point for understanding a home's worth and shouldn't be used in place of an appraisal or a realtor's expert advice. The estimates aren't legally binding.
🤯 Algorithms miss what really matters
Online estimators often fail to capture the intangibles that truly affect a home's value — not just major home improvements, but things like prestige, privacy, or high-profile neighbors.
"The most laughable estimate I’ve seen is a Beverly Hills property that got tagged at $11M online because the algorithm couldn’t factor in that Steven Spielberg lived next door, and that alone pushed the final price to $15M. After years in this market, I’d trust an experienced agent’s CMA over any digital estimate," says Wesley Kang, founder of Realtor 1099 Cafe.
How does Redfin calculate home values?
Redfin uses an algorithm — or automated valuation model (AVM) — to compute value based on a surface-level understanding of your home.
According to Redfin, its algorithm is based on multiple listing service (MLS) data for recently sold homes in your area. Because Redfin also sells homes as a broker, it has access to various data points that it can feed into machine-learning software. As a result, it can consider whether your home is on a busy street, has a water view, and more.
The Redfin Estimate uses over 500 data points about a home, its neighborhood, and the market to determine value.
Redfin doesn’t recommend using its estimate as more than a starting point. To get the most accurate comparative market analysis (CMA), you'll need to work with an experienced local agent. You can connect with a top local agent for a CMA report today by filling out this short quiz.
What happens if you rely on an inaccurate home value?
It's important not to put too much stock in a number that's generated without knowledge of your specific home or situation.
As a home seller, you may misprice your property. This may mean that you try to charge too much. As a result, buyers will focus on other homes and yours may sit for a long time without interest.
“Your AVM value might have a 95% confidence score, but you still run the risk of a possible inaccurate value estimate," says Cassidy.
On the other hand, you may underprice your home. There may be features about your house — including its location and recent upgrades — that make it worth more. If you underprice it, you’ll be sending a signal that there’s something wrong with the property.
As a buyer, relying too heavily on online estimates can cause you to miss out. You might mistakenly think a home isn’t worth a specific price due to an error in an estimate. On the other hand, you might think it’s worth more and that you’re getting a steal, when in fact you’re paying the proper price — or even too much.
“Online value estimators are getting worse, not better — especially in luxury real estate," explains Wesley Kang, founder of Realtor 1099 Cafe. "Redfin consistently misreads high-end properties because they can't grasp what actually matters to wealthy buyers.”
Getting an accurate estimate can also help you make a competitive offer on a home and negotiate the price with the seller.
Get a CMA from a realtor for the most accurate pricing
A comparative market analysis (CMA) is one of the best ways to get an accurate home value estimate. You can usually get one for free from a real estate agent, with no obligation to hire the agent.
Here’s how a CMA compares to an online home value estimator:
| CMA (Comparative Market Analysis) | HVE (Home Value Estimator) | |
|---|---|---|
| Created by | Real estate agent | Algorithm |
| Output | Personalized, detailed analysis | Quick estimate |
| Powered by | Local market expertise, more detailed info on comparable properties | Publicly available data (e.g., recent sales, property characteristics, market trends) |
| Accuracy | Considered more accurate due to professional judgment, local market expertise, and up-to-date info | Generally less accurate because it relies on averages, trends, and potentially outdated info |
| Uses | Pricing a home, negotiating effectively, avoiding overpaying for a home, identifying market trends, making informed decisions | Preliminary research or a rough idea of a property's value; not reliable for significant financial decisions |
Experienced real estate agents are professionals who spend their time understanding the local market in your area and valuing homes based on comparable recent sales. If you want to know the true value of your home based on today’s market, it's worth it to work with someone who can provide an expert, detailed analysis.
“A CMA goes far beyond what an algorithm can do. It combines public data with real-world insights, like layout, market timing, and school districts," says Matthias John, a realtor based in Charlottesville, VA.
Is a Redfin estimate close to an appraisal?
A Redfin estimate isn't as accurate or thorough as a professional appraisal, which is more reliable for determining a property's true market value. One reason appraisals are so accurate is that the reports are required to fall within the guidelines and rules set forth by the Uniform Standards of Professional Appraisal Practice.
"To obtain a real estate appraiser license an individual must take multiple appraisal classes, then obtain many hours of experience appraising properties under a licensed appraiser supervisor, followed by more classes and then passing a state licensing exam," says Mark Cassidy of Service 1st.
Here are some key differences between online home value estimators and appraisals:
- Accuracy: Appraisals are generally more accurate than online estimators because they involve a physical inspection and professional judgment. Home value estimators may not account for your home's specific features or conditions that could significantly affect its value. Online estimators rely heavily on data averages and trends.
- Scope: Online estimators provide quick estimates based on available data, while appraisals involve a detailed property examination.
- Purpose: Online estimators are often used for preliminary research or to get a rough idea of a property's value, while appraisals are typically required for mortgage lending or other significant financial transactions.
» MORE: What Is a Home Appraisal, and Do I Need One?
