70% of home shoppers now begin their house search on Zillow. Owners go there to get a quick “Zestimate” of the value of their home. Tenants and landlords go there looking for rentals or tenants. Google, Youtube, Facebook, Amazon, eBay….we have gotten use to all of these and many other websites as a way of conducting business and keeping up on relationships. Zillow only makes sense, right? Well…
Zillow is a start-up company that has yet to turn a profit because no one buys homes on the internet.
There’s a better app for buyers.
Recently two buyers contacted us through Zillow to find out about homes. One was never on the market; the other sold a long time ago. Inquiries like these are typical. The data Zillow provides to buyers is often dated and unreliable. Realtor.com is the only place on the internet where buyers find real estate information in real time. Zillow buys delayed and partial data from Realtor.com.
Sellers beware of the Zestimate.
It is fun to check your home’s value with Zillow’s “Zestimate,” but Zillow is only sometimes accurate. Because of the data model it uses, it is only accurate if a seller’s home is exactly average for their area. If the home is above average, Zillow will convince sellers to leave money on the table by underpricing their home. If the home is below average, then sellers may lose money by overpricing their property (overpriced listings net less to their sellers than correctly priced homes).
Smart home owners thoroughly value their best asset.
Zillow can be a good starting place for finding the value of your home. Home owners should also look at the property appraiser’s website for their county and add 20% to their valuation (the appraiser’s valuation is usually low and based on sales 1-2 years ago); and look at the price per square foot for similar homes and calculate a number. All three of these calculations together will give the home owner a general idea of their home’s price range, but not a comparative market value of their home.
Appraisers and competent real estate professionals value a home by using comparable sales only: recent sales that are 10% +/- the square footage of the home, similar style, construction and room count, going out 1 mile and back 3-6 six months (12 months is permitted—but the market is moving upward so older comps are ruled out). We usually have to see inside the home to give the owner a real number, since upgrades can make a $25,000 difference in valuation, or more.
We here at Sparrow Realty Group are ready to help home owners be accurate and informed. We are never too busy to help our clients with a real estate question or need. Contact us today for a free comparative market analysis.