Why Websites Can’t Replace a Realtor to Estimate Your Home’s Value
May 19th, 2009 categories: Selling your Home
There’s a bunch of real estate websites these days. There are sites like this one that keep the public informed from a professional’s perspective. There are sites like Realtor.com, Homes.com, Trulia, etc. that are mammoths of industry and have so much content that it’s sometimes hard to navigate but always informative. Then there are sites like redfin, zillow, and others that presume to be able to give you an accurate estimate of your home’s value through the use of some creative algorithms, market data, and pure guess-work. While all of these sites are in business to make money, the last set is hurting the real estate industry and the buyers and sellers that take their ‘word’ as the truth.
How is value estimated?
…By Realtors:
We estimate property value by performing a comparative (some people say comparable) market analysis. Now I’m going to say ‘I’ because this is how ‘I’ do it.
I take properties that have recently sold within the market area of the home to be valued, look at their sales data, adjust prices for differences between the subject property and the comparable, and then average those properties together to get a range that I suggest the property be listed within for the property to sale within the average number of days on market. I make further adjustments for location, amenities, unique features, property damage, any property or neighborhood stigma, and a host of other factors that can affect the sale price and/or days on market of the property.
I don’t look at appraisals, assessments, or get suggestions from other Realtors or the homeowners before I make my judgement of value. My CMA is based on years of experience in the LOCAL market, the current market conditions, and the features of the property valued.
…By Websites:
Some websites make an attempt to accurately estimate the buyer value of your home. That’s what you want to know right? What a buyer will pay for your house? Other websites simply display the ‘assessed value’ of your home. Let’s examine why the numbers you get from these two types of websites are both inherently awful…
With websites like Zillow.com, you can get an estimated value of your home called a Zestimate. What’s wrong with a zestimate? Lots of things.
- The data the zestimate is based on is inaccurate (wrong square footage, number of beds/baths, condition of home)
- There is no real attempt to take local market conditions into account
- The estimate does not figure in uniqueness of the property, desirability, and a load of other factors that help determine value.
Assessed value may be even more inaccurate but people tend to take it as ‘the final word’ because it is usually found on local government websites and taxes are based on assessments.
- An assessor measures the OUTSIDE of the house and then makes an educated guess as to what is inside, how it is laid out, and what materials are used. That sounds accurate doesn’t it?
- They then apply a formula (different areas vary here) where they apply a value to your home based on the square footage and surrounding values.
- A good example is my personal residence. The assessed value on my personal home is currently over $40,000 above where I would price it to sell if I had it on the market today.
Let me cover those objections.
- I don’t want to work with a Realtor or be Pressured…
Then don’t. You simply run the risk of mispricing your home, endangering your family by selling by-owner, and putting your financial future at risk. Sorry, I’m not going to sugar-coat it for you. You will not save money by selling by yourself or working with a discounter or web brokerage.
- Zillow says my home is worth X dollars and my Realtor says exactly the same thing!
I had a broken watch that was right…twice a day. Zillow estimates millions of home values. Some of them are actually going to hit the mark but not because they were valued the right way.
- I have the same floor plan as the house that just sold down the street for X dollars…that’s what my home’s worth right?
It may very well be, but is your yard the same size, do you have fencing, guttering, storm doors, shutters, an alarm system, hard wood flooring, or a big bunch of other possible differences from the house down the street? If so, you’re house is worth something different. A Realtor can tell you that.
Let’s be crystal clear.
A professional, knowledgeable Real estate agent that knows the LOCAL market is the only way to accurately estimate a sales price on your property. If you are going to any other source you are playing with fire. Don’t play with fire when it comes to the single largest asset you possess. Contact a professional, have them through the home, give them time to make an accurate assessment, get their price opinion in writing.
I do very few CMAs these days but I know lots of good Realtors that do. Contact me for my short list of great agents to help you price your property to sell, not sit. You can also fill out the form below. Thanks for reading.
