How Accurate Is Zillow’s AI Pricing for Washington Home Sellers?

By Nick Berard

Nick Berard is a world-class Realtor with a passion for helping clients manage wealth through real estate.

Most homeowners check their Zestimate before selling. Who wouldn’t want to when it’s quick, easy, and feels official? After all, it’s powered by Zillow’s more sophisticated AI system. But even in 2025, AI pricing tools still miss important details that can impact your home’s true value.

Let me tell you a true story. I recently had a client who looked at their Zestimate before selling. We thought it was off. The Zestimate was around $425,000, but my client had purchased a half-finished property, so Zillow was only capturing part of the picture.

My client finished the property, creating two different living structures and turning it into a vacation rental. They added many unique amenities that weren’t accounted for. We ended up selling the property for just over $609,000, whereas Zillow estimated it at $425,000. That’s almost a $180,000 difference!

That kind of gap is more common than you might think in 2025, and likely in 2026, when using these AI tools to value your home. Let’s discuss Zillow’s pricing algorithm, where it helps, where it misses, and what smart sellers are doing differently to get top dollar.

How Zillow’s AI really works. Zillow’s Zestimate uses an AVM (Automated Valuation Model) that pulls data from public records, tax info, recent sales, square footage, geographic trends, and some MLS data when available.

Its accuracy depends on the quality of the input data. For instance, if you’ve made upgrades to your home that aren’t on record, like my clients did, or if you’re in a neighborhood with a mix of home styles, the Zestimate can be inaccurate. You must consider how similar or different your property is to others and assess the accuracy of the information available.

Where it falls short for sellers. Remember, it’s called a Zestimate, not an appraisal. Zillow cannot walk through your home, so it can’t evaluate factors like lighting, finishes, curb appeal, or condition. It also lags behind real-time market shifts.

Zillow has admitted that it’s off by 2.4% for listed homes and 6.9% for off-market ones. This means that for a $600,000 house, the estimate could swing by $40,000. In reality, like with another client of mine, it can be off by as much as 30%. This case was somewhat of an outlier, involving separate structures and numerous improvements that Zillow wasn’t aware of.

How to use it the smart way. Think of the Zestimate and Zillow’s AI valuation like a weather app. It gives you a general idea, but you still want to check the sky to ensure you’re dressed appropriately before heading out. The same goes for pricing your home.

The Zestimate can offer a ballpark figure, but a local expert, like myself, provides the full story. You have to account for current buyer demand, recent upgrades, and what similar homes are actually selling for in today’s market. All these factors contribute to the science and art of determining your home’s current market value.

How it shapes buyer psychology. Buyers look at the Zestimate, whether it’s accurate or not. If it’s lower than your asking price, it can trigger lowball offers or raise doubts, even if your pricing is spot on. If it’s higher, it might make your list price feel inflated.

Either way, it shapes perception. That’s why aligning your pricing with real-time market realities and explaining why helps manage buyer expectations from the start.

Why Zillow can’t keep up with market shifts. Despite all the hype about AI being all-knowing and powerful, the reality is that today’s real estate market shifts quickly. A drop in interest rates or a new company moving into town can spike demand in a matter of days.

Zillow updates often, but it still relies on historical market data, such as closed sales and public information. By the time the algorithm catches up, the pricing window may have already changed, especially in our current market, where we might have more homes for sale than we’ve seen in six years.

If you’re considering the Zestimate, it’s time to dig deeper. Let’s compare that estimate with what your home is genuinely worth in today’s market. You might have more equity than you realize, or you could be at risk of pricing it too low.

Reach out to me for a personalized pricing consultation. We’ll strategize, analyze market trends together, and I’ll show you how the Zestimate stacks up. Give me a call at (360) 770-3245 or send a message to nickberard@kw.com. I’ll help you understand what your home is truly worth as we strategize your next move for you and your loved ones.