I am sure most SFH investors in the US have heard of Zillow.com. It basically uses an algorythem to determine the value of all homes based on other sales, sq footage, bed and bathrooms. Most of the time the Zillow estimated value is not even close. Does the mean the tool is useless? Not at all!
See Comparable Homes feature
This is by far my favorite feature of Zillow. If you click “See Comparable Homes” when you look up an address, make sure you pick a good zoom range (within 1 mile of the house). Then sort by “Sold On”, so it shows only the most recent sales. Now search for properties that are sold within 3 months and similar to yours (beds/baths, sq ft, lot size, etc). Most of the time these values are quite accurate, but the filter on comparables is pretty lose so make sure you do a good filtering.
Sales History Feature
Although this feature is not that relevant to determining values, it is sometimes nice to know the previous sales information on a property.
This typically shows is a property has recently sold at a Trustee Sale or what else has happened in the process.
Other Properties for Sale
You definitely need MLS access, but for me locating nearby properties can be somewhat difficult in the MLS. Using Thomas Guide grid zones never works very accurately for me. So on occasion I use Zillow to figure out what is going on in the local neighborhoods. Sometimes I checkout listings in the MLS. If you see 25-30%+ properties for sale, it’s easy to realize not to bother as not much is selling!
Overall Zillow is a great tool and can be useful, but as an investor definitely do not trust the Zillow given values.
DISCLAIMER: I AM NOT ADVOCATING USING THE ZILLOW ESTIMATED VALUE AT ALL. IN THIS MARKET I FIND IT TO BE INACCURATE BY A LOT.