I'd like to share an exellent article with you written by Heather Mendonca, a fellow REALTOR® and friend of mine from RE/MAX Visalia. Heather had the information reviewed by a representative from Zillow for accuracy. Enjoy!

There are several online website you can use to see what your home is worth but I will use the most popular, Zillow, in the following explanation to give you an idea as to how they all work.

To measure the accuracy of the Zestimates, Zillow goes back in time and compares the historic Zestimates with the actual transaction prices of homes that sold. Here's how it works:

Zestimate Accuracy/Star Rating: This shows how accurate the Zestimate is in a locale. Four stars indicate the best (most accurate) Zestimates, three stars better Zestimates, and two stars good Zestimates. One star indicates that Zillow is only able to show tax assessed values, and not Zestimates. If they do not show any stars, they do not have enough data to indicate valuations.

Median Error: Half of the Zestimates in an area were closer than the error percentage and half were farther off. For example, in Columbus, Ohio, Zestimates for half of the homes are within 5.7% of the selling price, and half are off by more than 5.7%.
Within 10%/Selling Price: This is the percentage of homes in a location for which the Zestimate was within 10% of the transaction price. For example, in the Sacramento area, 73% of the time the Zestimate was within 10% of the selling price.

According to Zillow the accuracy for Zestimates in Tulare County is 4 stars. They claim to be within 10% of the selling price 63% of the time. The median error is 6.3%. This means that if Zillow says that a home is worth $380,000 it could actually only be worth $342,000 if they are within at least 10%, 63% of the time. For those of you buying or selling a home this is a big difference in price!  Another thing to consider is the fact that Zillow does not always take into account current new home prices and incentives which are a major driving force in today's market. However, as long as you read the fine print Zillow can be a helpful tool. If you are about to list or buy a home I would check with a local REALTOR® for a free home valuation to see how they compare.