Wayne McCormick
Broker/Owner
Realty Executives of Northern Arizona
In today’s digital-first real estate environment, many clients begin their home search with Zillow. The Zestimate has become a familiar reference point, often shaping seller expectations and buyer perceptions before an agent ever enters the conversation. While Zestimates offer convenience, experienced real estate agents know they frequently miss the mark—and sometimes by a wide margin.
Understanding why Zestimates can be inaccurate helps agents educate clients, set realistic expectations, and reinforce the value of professional expertise.
Zillow’s Zestimate is generated by an automated valuation model (AVM) that analyzes public records, historical sales, and nearby comparables. What it does not do is walk through the home, evaluate workmanship, or understand buyer psychology.
Unlike agents, algorithms cannot assess condition, flow, natural light, curb appeal, or pride of ownership—factors that often determine how buyers perceive value and how aggressively they compete for a property.
Agents know that upgrades sell homes, but Zillow often doesn’t see them. A remodeled kitchen, new roof, upgraded HVAC, or high-end finishes may not be reflected in public data. As a result, homes with extensive improvements may be undervalued, while outdated or poorly maintained homes may appear overpriced online.
This disconnect is especially common in markets with older housing stock or where renovations are frequent.
Real estate is local—sometimes block by block. This is especially pertinent to the Flagstaff area. School boundaries, traffic patterns, views, zoning changes, national forests, and neighborhood reputation all influence value. Agents track these nuances daily; algorithms struggle to capture them.
In fast-moving or transitioning markets, Zestimates often lag behind reality. Agents see buyer demand, multiple-offer situations, and price adjustments in real time—long before those trends appear in an AVM.
Zestimates rely heavily on public records, which are often incomplete or inaccurate. Incorrect square footage, missing additions, wrong bedroom counts, or unrecorded improvements can significantly skew values. Even when homeowners claim their property and update details, the Zestimate may not meaningfully adjust.
Agents, on the other hand, verify data, measure homes, and reconcile discrepancies before pricing a property.
Custom homes, luxury properties, rural estates, historic residences, and mixed-use properties are notoriously difficult for automated models to price. With limited comparable sales, Zestimates become educated guesses at best.
Agents fill this gap by expanding comp criteria, adjusting for qualitative differences, and applying professional judgment—something no algorithm can replicate.
One of the biggest challenges agents face is helping clients separate online estimates from market reality. Sellers may anchor to a high Zestimate, while buyers may use a low one to justify unrealistic offers.
By explaining the limitations of Zestimates and presenting a data-backed comparative market analysis (CMA), agents reposition themselves as trusted advisors rather than salespeople.
Instead of dismissing the Zestimate outright, savvy agents use it as a conversation starter:
This approach builds credibility and demonstrates value through education.
Zillow’s Zestimate can provide a broad snapshot, but it cannot replace local expertise, on-the-ground insight, or professional analysis. Real estate agents bring context, accuracy, and strategy—qualities no algorithm can fully replicate.
For agents, the goal isn’t to compete with Zestimates, but to clarify their limitations and show clients why informed human judgment still matters most in determining a home’s true market value.
When you are looking for accurate, local information about the real estate market in Northern Arizona, come on in and see me or give me a call. Our office is proud to have been voted the Best Real Estate Agency/Company in Flagstaff for 5 years in a row. Let me show you what we can do together!
Welcome to Flagstaff! Whether you are here vacationing or searching for a home, or both! Here are a few fun family-friendly activities to check out while you are here.
Do you want to find out what expenses you can deduct as a new homeowner? No one likes paying taxes, so making the most out of tax deductions when buying a home can be appealing. Though there used to be better deductions available in the past, it could still be worth your while. You will have to file your tax return with itemized tax deductions to claim.
There are many home buying tax deductions that could potentially reduce your tax bill by thousands. The IRS standard deductions are more substantial now than they used to be, meaning that it may not be worth the trouble of itemizing your expenses. Standard deductions for 2020 were $24,800 for married couples and $12,400 for single people. The head of household deduction was $18,650.
If your real estate deductions are more than the standard amount allowed, it is worth your while to itemize. If not, stick wit hthe standard tax deduction. Let's look at he deductions available to home buyers.
MOVING EXPENSES
To qualify to get moving expenses deducted on your federal income tax return, you must meet three IRS requirements as follows:
1. The moving expense must be closely tied to the start of new employment. Also, you are only able to deduct the costs you accumulated within a year of when you started your new job. If you don't move closer to work within the first twelve months of the new job, you'll lose the ability to deduct the moving expenses.
2. In order to qualify, the new job would have to add at a minimum fifty miles to your commute if you stayed in your previous home. For example, if your last employment required you to commute ten miles from your former job, your commute to your new work would need to be at least sixty miles from your previous home.
3. After the move, you have to work full-time at your new job for a minimum of thirty-nine weeks in the first year of employment. If you are considered self-employed, you will need to work full-time for at least seventy-eight weeks during the first two years of your new job.
So, what can you deduct? Some of the allowable moving expenses could possibly include the following:
Make sure that you can document any of the deductions you plan on taking. The Internal Revenue Service suggests that you keep bills, receipts, credit card statements, canceled checks, and any mileage logs. Make sure you stash these records away somewhere safe in case an audit happens, or the IRS has any questions.
MORTGAGE PAYMENTS
When paying back your mortgage, some of the monthly payment is for the interest on the loan. You can take this interest payment as a tax deduction. The amount you can claim depends on when you started the mortgage.
If you took out the mortgage before October 14, 1987, you might be able to deduct all the interest paid. If the loan began between October 14, 1987, and December 15, 2017, you can claim deductions up to the value of $1 million. For mortgages which started on December 16, 2017, or later, deductions of up to $750,000 can be made. Married couples that are filing separately will only be allowed to claim half the amount however.
HOME EQUITY LOANS
It used to be the case that you could claim interest paid on equity loans regardless of what the money was used for. Now you can only make interest deductions on money used to improve your home. An equity loan will be added to the total mortgage when claiming interest deductions. If you have reached the maximum deductible amount with your first mortgage, you won't be able to claim more for an equity loan.
DISCOUNT POINTS
For example, you borrow $300,000; one point would equal three thousand dollars. If you plan on bieng in the home for an extended period of time, it makes sense to pay points as you'll be bringing down your interest rate.
If you move around a lot and know you won't stay in the house long, paying points would not be wise. Consult with your lender so they can show you the differences in payments between both choices.
If you paid points in the past year, they are the home tax deduction you will want to remember.
PROPERTY TAXES
Property taxes offer a limited chance to increase deductions. You can claim up to $10,000 or $5,000 for married couples filing separately. This can be claimed as a combination of local and state, property, sales, and income taxes. Property taxes used to be a far more significant deduction, but that changed over the last few years when the tax code was modified.
WORKING FROM HOME
MEDICAL DEDUCTIONS
If you need to install equipment in your home, which is required in order to help the accessibililty necessary due to medical problems, this can be added to deductions. If the improvement is permanent and increases the value of the property, the deductible amount is reduced by the increased amount. Medical equipment that is needed for you or your spouse or a dependent can be included in this.
EXPENSES THAT CAN'T BE CLAIMED
While there are some costs that you can claim for, there are many more home expenses that aren't covered. Home buying tax deductions don't include stamp taxes, appraisal fees, or forfeited deposits. You can't claim the costs of utilities or rent from living in a home before closing. Depreciation on the property also shouldn't be added to your itemized deductions.
When you're ready to buy, come see us!
