What's the Difference Between Zillow Offers vs. Zestimates?

By 

Clever Real Estate

Updated 

August 26th, 2019

SHARE

When you’re selling your home, Zillow can be a helpful tool in helping you understand your local market. To get the most from its features, it’s important to understand the difference between them. Here’s a closer look at the difference between Zillow Offers and Zestimates.

Zillow is chock full of features for buyers and sellers alike, but two features that sellers are most interested in are Zestimates and Zillow Offers. They both can provide sellers an idea of what their home is worth.

But the home values provided by Zestimates and Zillow Offers are far from perfect. They can be limited by the quality and amount of local data and Zillows interest in making money on the homes they buy through Zillow Offers.

The best way to get accurate values for your home and the rest of your real estate market is to talk to a local realtor. They have the nuanced knowledge and experience to conduct a comparative market analysis and determine a competitive price for your home.

Learn how a top agent can help you understand your market and provide you with a free CMA.

In the meantime, here’s a comprehensive look at what Zillow Offers and Zestimates are and how they can help homeowners sell their current home:

What is Zillow Offers?

Relatively new, Zillow Offers is the platform’s unique home-buying program. For homes in specific markets, sellers can request a cash offer from Zillow — even if your home isn’t listed for sale. Zillow will make a no-obligation offer based on their valuation of the property, which the homeowner can accept or reject the offer.

There is no cost or fee to request an offer and no harm in rejecting the offer.

Right now, Zillow Offers is only available in select markets, including:

  • Atlanta, GA
  • Charlotte, NC
  • Colorado Springs, CO
  • Dallas, TX
  • Denver, CO
  • Fort Collins, CO
  • Houston, TX
  • Las Vegas, NV
  • Minneapolis-St. Paul, MN
  • Nashville, TN
  • Orlando, FL
  • Phoenix, AZ
  • Portland, OR
  • Raleigh, NC
  • Riverside, CA/Inland Empire

If Zillow Offers is available in your area, you can send Zillow some basic data about your home via their questionnaire, which, usually takes about five minutes.

Zillow will typically respond with a cash offer within two business days. Since there’s no obligation to accept the offer, many homeowners use the feature to get an idea of what their home is worth. If you don’t want to accept the offer, it expires in five days.

If you do want to accept, you can circumvent traditional home selling steps, such as getting the home ready for showings, hosting open houses, or making repairs (Zillow will deduct the costs of repairs from your offer).

What are Zestimates?

Each house on Zillow features a Zestimate, which is Zillow’s best guess of what a home is worth. The platform generates Zestimates based on an algorithm that looks at local market activity, public data, and other factors.

To be clear, Zestimates are not official appraisals. Rather, they’re often used as a starting point for buyers and sellers as they’re exploring a specific market. Sellers should not base their home value by the Zestimate, but rather by an official appraisal performed by a local expert.

How accurate is Zillow's Zestimate?

Zillow itself will be the first to say that the Zestimates are not 100% accurate. The company says that the nationwide median error rate for on-market properties is 1.9%, but this can vary greatly by area. For off-market homes, the median error rate jumps to 7.5%.

Get an accurate assessment of your home's value.

A Clever Partner Agent will provide you with a free CMA.

Does Zillow offer market value for homes?

Zillow looks at the current market value of your home before presenting an offer. After deducting a service fee (similar to real estate agent commissions) and estimated closing costs and repairs, the bottom line offer likely won’t be as much as what you would have gotten listing your home on the open market.

How does Zillow Offers determine how much to offer?

Zillow looks at a number of factors to form an offer, including the details you provide about your home, comparable homes in your local market, and an appraisal conducted by a local expert.

Will your offer price be the same as your Zestimate?

The Zestimate and the Zillow Offer are two different things, so the two numbers will likely not match up. The Zestimate does not factor in the cost of repairs, service fees, or the results of an in-person appraisal, but the Zillow Offer will.

Will requesting a Zillow Offer affect a Zestimate?

No. Zestimates are calculated with a number of data points, including any updates to your home facts, what nearby homes are selling for, changes in tax-assessed values, and other changes in public data. Receiving an offer will not affect these factors.

3 Alternatives to Zillow Offers Worth Considering

There are several alternatives to Zillow Offers, so don’t feel discouraged if the offer you receive doesn’t meet your expectations. Here’s a quick look at some other options:

Zillow Make Me Move

If you aren’t ready to list your home but want to see if there’s any interest, consider the benefits of Zillow Make Me Move. This free service allows you to tell others what price you’d be willing to sell for without having to list your home on the market.

Opendoor

Opendoor is similar to Zillow Offers in that you can request an offer from the company without having to list your home for sale. Provide details about your home and get a cash offer within 24 hours with no risk of a deal falling through. You get to pick your closing date and move on your terms.

However, as with Zillow Offers, you may not be able to get the full market value for your home.

A Full-Service Real Estate Agent

The most profitable way to sell a home is to work with a full-service real estate agent. They have the knowledge and experience to accurately price your home and get you the best price.

Our Clever Partner Agents provide all the same services as a traditional agent but work for a reduced commission to save you thousands of dollars in the process. You get to keep more of your home sale in your pocket and don’t have to settle for an offer that’s below market value.

Contact Clever to learn more about how a Partner Agent can competitively price your home.

FAQs for Sellers Considering Zillow Offers

Is Zillow or Redfin estimate more accurate?

Redfin says its median error rate is just 1.77% for on-market homes and 6.66% for off-market homes. Zillow claims to have a composite median error rate of no more than 7.9%, but the company recently announced that margin of error would soon drop to 4%, which could put its figures into a more acceptable range.

Does Zillow have its own agents?

Zillow is a real estate database, not a brokerage, which means that Zillow does not have its own agents. Instead, Zillow uses outside agents (often those who pay for Zillow Premier Agent status) to handle Zillow-owned properties for sale.

Does it cost money to sell your house on Zillow?

Zillow is a free platform that allows homeowners to list their houses for sale by owner or with an agent. However, listing a home for sale on Zillow is not the same as listing on the MLS, which will require a fee.

Does Zillow pull listing data from the MLS?

Since Zillow is not a brokerage, it cannot pull data directly from the MLS. However, it does receive access to the MLS by negotiating data sharing and syndication agreements.

Related Articles

You May Also Like