If you’ve ever looked up a home on Zillow, chances are your eyes went straight to the Zestimate. That big, bold number feels official — almost authoritative. For buyers, it can shape expectations. For sellers, it can spark excitement or panic.

But here’s the truth most people don’t realize until it costs them money: a Zestimate is not a home’s value — it’s an algorithm’s guess. And guesses can be very wrong.

Let’s break down why you can’t fully trust a Zestimate and what actually determines a home’s real market value.

1. A Zestimate Is Based on Data — Not Reality

Zillow’s Zestimate is created by an automated algorithm that pulls from public data sources like tax records, previous sales, and nearby listings. What it doesn’t see is often the most important stuff.

The algorithm can’t walk through the home. It doesn’t know:

• If the kitchen was remodeled last year or stuck in 1992

• Whether the roof is brand new or nearing the end of its life

• If the layout feels open and inviting or awkward and choppy

• How much natural light the home gets

• Whether the backyard backs up to a peaceful park or a busy road

Two homes can have the same square footage, year built, and lot size — yet sell for dramatically different prices because of condition, updates, and overall feel. A Zestimate can’t account for that human element.

2. Small Data Errors Can Create Big Price Swings

Zestimates rely heavily on public records, and those records are often outdated or flat-out wrong.

Common issues include:

• Incorrect square footage

• Missing bedrooms or bathrooms

• Finished basements not counted

• Renovations never recorded with the county

If Zillow thinks your home is 1,800 square feet when it’s actually 2,300, the value will be skewed — sometimes by tens of thousands of dollars. And homeowners rarely check those details until something looks “off.”

3. Zestimates Struggle in Changing Markets

Algorithms are backward-looking by nature. They rely on past sales, not what’s happening right now.

In fast-moving markets, this creates problems:

• When prices are rising quickly, Zestimates often lag behind

• When the market cools, they can stay artificially high

• Sudden shifts in interest rates or buyer demand aren’t reflected immediately

A human professional can adjust pricing based on real-time buyer behavior. An algorithm can’t feel urgency, hesitation, or competition — it can only crunch yesterday’s numbers.

4. Unique Homes Confuse Algorithms

The more “cookie-cutter” a neighborhood is, the better Zestimates perform. The more unique a home is, the worse they get.

Zestimates tend to miss the mark on:

• Custom homes

• Rural properties

• Homes with acreage

• Older homes with character

• Properties in areas with few recent sales

If there aren’t strong comparable sales nearby, the algorithm fills in the gaps with assumptions — and assumptions aren’t appraisals.

5. Zillow Even Admits Zestimates Aren’t Exact

This part surprises a lot of people.

Zillow openly states that Zestimates are not appraisals and should be used as a starting point, not a definitive value. In fact, Zillow publishes its own error rates — and in many markets, the Zestimate can be off by 5–10% or more.

On a $400,000 home, that’s a $20,000–$40,000 swing.

That’s not pocket change.

So What Should You Use Instead?

A home’s true value comes down to what a buyer is willing to pay in today’s market — and that’s best determined by combining data and human insight.

Better alternatives include:

• A Comparative Market Analysis (CMA) from a local real estate professional

• Recent comparable sales that actually match your home’s condition and features

• Local market knowledge about buyer demand, pricing strategy, and timing

An experienced agent doesn’t just look at numbers — they interpret them.

The Bottom Line

Zestimates are easy. They’re fast. And they’re tempting to believe.

But they’re also incomplete.

If you’re buying or selling a home, trusting an automated estimate alone can lead to overpricing, underpricing, or missed opportunities. Use Zestimates as a conversation starter, not a final answer.

When real money is on the line, nothing replaces local expertise and a true market evaluation.