⚠️ Disclaimer: This article is for informational purposes only and does not constitute financial, real estate, or investment advice. Zillow’s Zestimates, pre-foreclosure listings, and other property information may not always be accurate or up to date. Always verify property details with a licensed real estate professional or local MLS before making any buying, selling, or investment decisions.
Zillow.com is an essential starting point for millions of homebuyers, sellers, and investors. However, to use the platform effectively in 2025, it is crucial to understand its limitations. This article breaks down the three most important things to know about Zillow’s data.
1. The Zestimate Is an Estimate, Not an Appraisal
The “Zestimate” is Zillow’s proprietary algorithm for estimating a home’s market value. This valuation tool relies on public and user-submitted data, such as bedroom count, square footage, and recent sales. While powerful, it is not always accurate.
Why the Zestimate Can Be Wrong
The algorithm’s accuracy is heavily dependent on the quality of its data.
- Incorrect Data: If public records have the wrong number of bedrooms, baths, or square footage, the Zestimate will be incorrect.
- Property Condition: The algorithm cannot see inside a home. It cannot know if a house has a brand-new kitchen or is a complete fixer-upper.
- Skewed Comps: A foreclosure or distressed sale in the neighborhood can drag down the Zestimate of surrounding properties, even if they are in perfect condition.
Zestimate Accuracy in 2025
According to Zillow’s own data for 2025, the platform’s accuracy varies significantly:
- On-Market Homes: The median error rate is approximately 1.94%. The algorithm is more accurate because it uses the active list price, photos, and agent-provided MLS data as key data points.
- Off-Market Homes: The median error rate jumps to approximately 7.01%. Without a list price or current MLS data, the Zestimate must rely on older, often inaccurate public records.
For example, a 7.01% error on an off-market home with a Zestimate of $500,000 means its actual value could be $35,000 higher or lower. In a famous (though older) example, Zillow’s former CEO, Spencer Rascoff, sold a property in 2016 for 40% less than its Zestimate at the time.
The most reliable way to determine a home’s value is a professional appraisal or a comparative market analysis (CMA) from a local realtor.
2. “Pre-Foreclosures” Are Not For Sale
One of the most confusing features for buyers on Zillow is the “pre-foreclosure” tag. It is essential to understand that these homes are not for sale.
What Pre-Foreclosure Means
This tag simply means the homeowner is delinquent on their mortgage payments, and the lender has filed a public notice of default. This is the first step in a legal process that could eventually lead to a foreclosure auction months or even years later.
The homeowner—not the bank—still owns the property. They may resolve the issue by:
- Paying the past-due amount.
- Negotiating a loan modification with the bank.
- Selling the home through a traditional (or short) sale.
Zillow displays these public-record notices primarily to generate leads. Buyers who click on them are often routed to agents. These listings do not represent an immediate opportunity to buy a bargain home. See Things to Do Before Renting Out Your House In Florida and Vacation Rental Buying Guide.
3. Zillow’s Listings Are Not Always Complete or Updated
A common misconception is that Zillow and the local Multiple Listing Service (MLS) are the same. They are not. The MLS is the primary, real-time database used by licensed real estate agents. Zillow is a syndicator that pulls data from the MLS.
This distinction is more critical than ever in 2025 due to new listing policies.
Why Zillow’s Inventory Lags
The idea of a simple “2-3 day lag” is outdated. The real issue is that many MLS listings may be intentionally delayed or may never appear on Zillow at all.
Clear Cooperation Policy (CCP):
New rules require an agent to enter a listing into the MLS within one business day of any public marketing (like a yard sign or social media post). If they fail to do this, Zillow may not display the listing.
Seller Opt-Outs:
New NAR policies in 2025 give sellers more options, including the ability to list only on the local MLS and opt-out of syndicating their listing to public portals like Zillow.
This means buyers who only watch Zillow are at a disadvantage. They may be seeing “active” listings that are already under contract or, more importantly, they may be missing out on new listings that a seller has chosen not to display on the site.
The only way to ensure you are seeing 100% of the available inventory in real-time is to work with a realtor who provides listings directly from the MLS.
Conclusion
Zillow is a helpful platform for browsing homes and getting a general idea of property values. However, its data has clear limitations. For the most reliable information, serious buyers and sellers in 2025 should combine Zillow’s tools with the professional guidance of a local realtor who can provide accurate valuations and access to the complete, real-time MLS.