Redfin Estimate vs. Zillow Zestimate: Which Home Value Tool Is More Accurate?

A 2016 independent study commissioned by Redfin found that its Redfin Estimate was significantly more accurate than competing tools from Zillow and Homes.com in predicting final home sale prices. The analysis of over 5,000 closed sales revealed that nearly two-thirds (64%) of homes sold within 3% of the Redfin Estimate, compared to just 29% for Zillow's Zestimate and 16% for Homes.com. For home buyers and sellers relying on Automated Valuation Models (AVMs)—computer-generated property value estimates—this data highlights critical differences in tool reliability.

How Was the Home Value Estimate Accuracy Study Conducted?

To ensure an objective comparison, Redfin hired SSRS, an award-winning independent research firm. The methodology was rigorous. Each day from October 19 to November 30, 2016, SSRS randomly selected a sample of homes from 189 metropolitan areas that had just gone under contract. Within 36 hours of a home going pending, researchers recorded the value estimates from Redfin, Zillow, and Homes.com. Once these homes closed and the final sale price was public record, SSRS compared the estimated values to the actual price. The study ultimately analyzed 5,661 sales with estimates from both Redfin and Zillow.

The key metrics for accuracy were:

• The percentage of sales within 3% of the estimate: A closer percentage indicates higher precision.
• The median error rate: This shows the typical deviation from the sale price across all homes in the study.

What Were the Specific Accuracy Results?

The study's results presented a clear hierarchy in AVM accuracy for listed homes at the time. Redfin's tool demonstrated a substantially lower median error rate.

This data means that for a home sold for $500,000, the Redfin Estimate was typically within about $10,300 of the final price. In contrast, the Zestimate was often off by nearly $29,750, and the Homes.com estimate by over $51,300. This level of variance can significantly impact a seller's pricing strategy or a buyer's offer decision.

Why Do Automated Valuation Models (AVMs) Have Different Results?

An Automated Valuation Model (AVM) is an algorithm that uses public data like recent sales, property characteristics, and market trends to calculate a home's value. However, not all AVMs are created equal. The disparity in accuracy stems from the underlying data sources and the sophistication of the algorithm. According to the study's lead, Dr. Aniruddha Banerjee, the findings suggest Redfin's model was more effective at processing available data to predict the final sale price. Factors like the timeliness of data updates, the inclusion of comparable properties (comps), and adjustments for unique home features can all cause estimates to diverge.

How Should Homeowners and Buyers Use Online Estimates?

While this study indicates one tool may be more accurate on average, it is crucial to understand the limitations of any AVM. These tools provide a helpful starting point but are not a substitute for a professional appraisal or a Comparative Market Analysis (CMA) performed by a local real estate agent. A CMA is a detailed report prepared by an agent that evaluates similar recently sold homes, active listings, and local market conditions to determine a competitive price.

Based on our experience assessment, you should use AVMs with the following considerations:

• View them as a preliminary estimate, not a definitive value.
• Recognize that local market knowledge is irreplaceable. An AVM cannot account for a home's exact condition or unique neighborhood nuances.
• For the most accurate pricing, consult a real estate professional who can provide a CMA tailored to your specific property.

The core takeaway is that online home value tools vary widely in accuracy. The most informed decisions come from using multiple sources, including AVMs and the expert opinion of a local agent, to establish a realistic price expectation whether you are buying or selling.