Zestimate by Zillow is one of those Automated Valuation Model (AVM) that estimates your property’s value. This and other similar AVMs use a computer algorithm to determine the value of the property based on numbers available through MLS (Multiple Listing Service), tax records, square footage, number of bedrooms, baths, garages, etc.

But the issue is that this algorithm has no real way to take the condition or the interior of the property into consideration. Instead, it simply uses some mathematical averages. The software does not take into account if you have waterfront property or you recently redesigned and refurbished your kitchen or master bath, which can increase the value of your property.

Now, if you are a buyer, and you visit these different websites to access the value of the home you are interested in, you will often go with the lowest value and use it in your negotiation. But if you are a seller, obviously you will go with the highest value. But all these efforts on both sides are not much use to anyone.

At the end, when your lender is going to lend you money, they will not consider any of those values. They would want to see the appraised value. Appraisers have special tools and knowledge to estimate the best value for your property. But appraisals are not cheap. They can run around an average of $400-600 depending on the size of the property. And as a home buyer or an investor, it is impossible to get appraisals done for each and every house you are interested in.

In such cases, the best way to get the valuation of any property is by using CMA (Comparative Market Analysis). Realtors have this special tool and knowledge to create CMA using plenty of accurate data available to them. It does not only use algorithms but also uses human intelligence and input to get the final result. If Zestimate and other AVMs are science, you can easily say that CMA is Art with Science, combined together.

CMA uses much more data than just some statistical numbers to generate the estimate. It takes into account the features, quality, location, and the condition of the subject property and compares that to similar properties in a similar neighborhood (apples to apples). It takes human intelligence where a Realtor will literally evaluate all the factors mentioned above and make adjustments based on differences or similarities of all these properties to get that final figure.

1. Sellers get a fact-based, objective assessment of their home's value.
2. Sellers are protected from undervaluing their home.
3. Less stress for them as their home does not remain long on the market.
4. Sellers avoid the delay that occurs when they accept a high offer but cannot sell as the property does not appraise for the offered price.

1. Buyers receive fact-based, objective information about homes, which is important when they are not familiar with the local market.
2. Buyers are less likely to lose the home on which they put unreasonably low offer.
3. They are more likely to obtain quick mortgage because the house appraises as per correct CMA price.
4. They will not end up paying more for a home.