Zillow has quickly become the #1 spot to search for homes for many buyers in today's real estate market. A large part due to the compressive set of statistics, general market data, and list of home amenities. Many homeowners have also found it helpful in finding what could be their market value in today's market conditions. In an effort to help homeowners understand their home values, Zillow created what is called "Zestimate."

The ZestimateĀ® home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions.

Using the Zestimate can be a beneficial tool in understanding the current Real Estate Market, but the little dirty secret is how inaccurate the Zestimate can be, costing homeowners thousands of dollars if not tens of thousands. Now the appropriate question to ask is why?

Well, there is a lot that goes into the "proprietary formula" such as public and user-submitted data, location and market conditions but the most substantial factor is SOLD data provided to Zillow by the local MLS and/or private user. That's where the "proprietary formula" falls short in Montana Real Estate.

The proprietary formula was developed from and for states that require sale price to be disclosed to the public at the point of closing, allowing the proprietary formula to be very accurate almost within 3.5%. But the Zestimate wasn't necessarily built for a non-disclosure state, which means that the MLS cannot share the SOLD data with Zillow to appropriately calculate home values using the Zestimate.

The State of Montana happens to be a non-disclosure state, which again means that the MLS cannot share the SOLD data with Zillow. Zillow recognizes this and has developed a scoring sheet to "educate" the general public.


This rating is tied to the Median Error in an area. The ratings are as follows:

Four Stars = Best Zestimate

Three Stars = Good Zestimate

Two Stars = Fair Zestimate

One Star = Tax assessor's value, or unable to compute Zestimate accuracy

0 stars = No valuation

What does this mean to you? Well, take the Zestimate for what is it. A proprietary home value formula developed to help homeowners understand the real estate market but unfortunately falls short for home values in Montana due to missing some KEY variables (SOLD DATA). The Zillow rating for Montana is a One Star.

I tell all my clients the Zestimate is a great starting point but like Zillow even says, "..encourage buyers, sellers, and homeowners to supplement Zillow's information by doing other research such as:

-Getting a comparative market analysis (CMA) from a real estate agent

-Getting an appraisal from a professional appraiser".

My #1 recommendation is to trust your LOCAL expert and call your REALTOR. You will find that many are happy and willing to complete a FREE comparative market analysis.