Zillow’s Own CEO Proved Zestimates Can Be Wrong
If you’ve ever checked your home’s value on Zillow, you’ve likely seen the Zestimate — a fast, automated “guess” at your home’s worth.
It’s convenient and free, but as real-world examples prove, it’s often wildly inaccurate.
Even Zillow’s own CEO, Spencer Rascoff, sold his Seattle home for 40% less than what Zillow’s Zestimate predicted.
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Zestimate: $1.75 million
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Actual Sale Price: $1.05 million
(Source: Inman, Hunt Real Estate, GeekWire)
If even the CEO’s own algorithm couldn’t get it right, how reliable is it for your home?
Why Zillow’s Zestimate Gets It Wrong
Zillow’s algorithm crunches numbers — not context.
Here are some reasons it can be far off base:
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Unique Property Features: Lot shape, upgrades, layout, and condition can’t be fully quantified by data. Rascoff’s home sat on a triangular lot, confusing the algorithm.
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Street Location: Homes on busier or less desirable streets appraise differently — Zestimates rarely adjust correctly.
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Lagging Data: Zillow’s model updates slowly; it took months to catch up to the CEO’s actual sale.
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Missing MLS Access: In some markets, Zillow doesn’t have complete Multiple Listing Service (MLS) data, limiting its comparables.
Zillow itself reports an average national error rate around 7.9 %, meaning half of all Zestimates are even worse.
On a $1 million property, that’s roughly an $80 000 swing — before any local nuances are factored in.
When Zillow Bet Big — and Lost Bigger
This isn’t just a homeowner problem — even Zillow itself lost billions trusting its algorithms.
In 2021, Zillow’s home-flipping division, Zillow Offers, relied on automated valuations (essentially “Zestimates with money behind them”) to buy and resell homes. The result?
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$881 million loss in one year from bad pricing decisions.
(Inverse)
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Zillow’s overall net loss that year ballooned to $528 million, primarily from the failed flipping model.
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The company eventually shut down Zillow Offers entirely after its algorithm couldn’t keep pace with market realities.
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Investor confidence plummeted, wiping out roughly $40 billion in Zillow’s market value as its stock dropped more than 75 %.
In short, Zillow bet on its own Zestimate data — and lost nearly a billion dollars doing it.
If an algorithm can’t price homes accurately for the company that built it, it’s risky for homeowners to depend on it too.
What This Means for You
Homeowners often say, “But Zillow says my home is worth $X!”
Here’s why that’s dangerous:
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It ignores local market shifts and neighborhood trends.
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It misses upgrades or needed repairs that affect real value.
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It lags behind real-time market activity.
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It’s often off by tens of thousands of dollars — even in stable markets.
Algorithms don’t walk through your living room, evaluate your renovations, or compare the school district down the street.
But a real estate professional does.
Why a Local Real Estate Agent Beats Any Algorithm
As a local expert, I use on-the-ground experience and up-to-the-minute MLS data to give you a true market value — not an online guess.
When you work with me, you’ll get:
✅ Accurate local comps that Zillow can’t see
✅ Hands-on property evaluation — I assess condition, design, and upgrades
✅ Market-timing strategy to help you sell for top dollar
✅ Human insight — because no algorithm can read buyer emotions
Zillow’s Lesson: Data Alone Doesn’t Sell Homes
Even Zillow’s own billions couldn’t beat real-world complexity.
Their losses prove one thing: housing markets are human markets — driven by emotion, location, and insight, not just data points.
🏡 Want to Know What Your Home Is Really Worth?
Zillow’s algorithm didn’t work for Zillow — don’t let it misprice your biggest asset.
Let’s find your home’s true value — with precision, experience, and no algorithm guesswork.
