Many sellers and seller's realtors oftentimes suggest Zillow is wrong. I don't work at Zillow but my guess is they are much closer to actual value than most people would like to admit. Their algorithms get better with time and with more data (sales). If you assume there are smart people at Zillow then they are probably looking at the same things the smart people on this forum would look at to define value (tax assessments, actual sales, etc.). The only difference is they are trying to assess values of thousands to millions of homes (algorithmically) while we get to do it for a specific house empirically.
I don't trust Zillow implicitly but I do think it does provide a good estimate for most homes. Yes, there are outliers but those outliers are not always the house that we own.
