Why home value estimates disagree

One house can have four different values on the same day. A Zestimate, a Redfin Estimate, a tax assessment and an appraisal are all answering different questions. Two of them come from computer models. Those are usually close when a home is for sale, and often miss by tens of thousands when it isn’t. Here is the same house through each one.

The online estimates

Say the house is a three-bedroom that isn’t for sale. You look it up on Zillow and Redfin and get two numbers $25,000 apart.

Both are automated estimates. A computer model looks at the home’s features, public records and recent nearby sales, and works out a likely price. Neither company sends anyone to look at the house. Both say plainly that their estimate is not an appraisal.

Both also publish how far off they tend to be. For homes not on the market, the Zestimate has a median error of 7.2%. The Redfin Estimate has 7.4%. Those were the published figures as of mid-October 2026. Both change every month.

A median error means half the estimates miss by more than that. On a $400,000 house, 7% is about $28,000. So two estimates $25,000 apart are both behaving normally.

The same house, listed for sale

Now the owner lists it. Both estimates usually snap much closer to reality. For homes on the market, the median errors drop to about 1.8% at Zillow and 1.9% at Redfin.

Zillow lists the asking price among the things its model can see once a home is listed, and it’s a strong clue. That’s worth remembering when an estimate seems to confirm a list price. It may partly be repeating it.

The tax assessment

The county’s assessed value is often far from any of these. That isn’t a mistake. It’s a tax number, set by state rules.

Some states assess at a fraction of market value on purpose. Illinois assesses most homes at a third of market value, and Cook County at 10%. Others cap how fast the assessment can rise. In California, a home’s taxable value can grow at most 2% a year until it sells. A house owned since the 1990s can carry an assessed value a fraction of what it would sell for.

So never read an assessment as a price. It tells you about the tax bill, and even that changes after a sale.

The appraisal

If you make an offer with a mortgage, the lender will usually order an appraisal. A licensed appraiser, who usually visits the home, compares it with recent sales nearby. Fannie Mae’s rules ask for at least three closed sales, normally from the last year, as similar as possible in size, style and condition.

Which sales count as “similar” is the appraiser’s judgment. Two appraisers can pick different ones and land on different values. For a typical first mortgage, the lender must give you a copy at least three business days before closing.

Lenders that use automated estimates for loans now have federal rules too. Since October 2025 they must test those estimates and guard against errors and bias. The free estimates on listing sites are a different thing, made for browsing.

How close do the models get, really?

A 2018 Federal Reserve study is a useful reality check. It compared one provider’s automated estimates from 2014 with what homes actually sold for. Only about half landed within 10% of the sale price. Owners’ own guesses did better, at about two in three.

The models have improved since. The lesson still holds: an estimate is a starting range, not a fact.

What our map shows instead

We don’t estimate single homes at all. Our home cost layer shows what homes in an area have actually sold for, as a typical figure for the whole area. It answers “can I afford to live around here,” which comes before “what is this house worth.” Our housing cost page explains why we use sales rather than asking prices.

Using the numbers well

• For an unlisted home, treat an online estimate as off by around 7% either way. Half of them miss by more than that.
• Look up the actual recent sales nearby yourself. They are the raw material every method uses.
• Ask your agent which sales they compared against, and why those.
• Never use the tax assessment as a value, and expect your tax bill to change after you buy.
• If the appraisal comes in low, the comparable sales in it are where to start asking questions.

If you want to see what homes typically sell for across a whole area, the home cost layer is on the map.