But Zillow says my house is worth… How many times have I heard this?!?
Have you read this article? Fast forward to the image caption:
Zillow CEO Spencer Rascoff, shown in his downtown Seattle office, says Zestimates are “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%. (Ellen M. Banner / TNS)
Do you know the median error rate of 8% on a $200,000.00 house? That’s approximately $16,000.00!!! As you can probably imagine, this makes for a difficult conversation with a seller if the local market says their home value is actually 16K LOWER than their “zestimate.”
Here’s a real world example: I, Jennifer, recently refinanced our house to capitalize on the extremely low interest rate. I completed a CMA, the same ones I do for you, and felt confident in the value range produced. I checked Zillow, the same Zillow I check for your zestimate, and saw that our property was “zestimated” $81,000 higher than what the actual, closed data showed for our neighborhood. Holy, Cats. $81,000?!? That’s crazy. We had the bank appraisal done as required by our lender, and sure enough, Zillow was off- way off- 8% off and wait for it… $86,000 HIGHER than our house is actually valued. Sure, the margin of error was within the published range, but you guys, that’s a huge discrepancy!!!
I’m not saying you shouldn’t look at sites like this. These sites have their place as an additional source, but you should consume this data with a grain of salt. I have found most consumers have a hard time wrapping their mind around this, but think about it this way: It’s like visiting your doctor and saying, “webMD said I had “X” wrong with me, so that has to be true.” Your doctor will look at your symptoms, your medical history and pull together a complete medical approach to your illness. WebMD is an information source but should never replace your physician! As a matter of fact, WebMD even has this disclaimer at the bottom of all of their pages!
Do I look at Zillow? Yes, I look at Zillow and I pull your “zestimate.” Why? Because I need to know what numbers you have in your head and what your potential buyers are seeing. This “zestimate” affects our sales strategy.
When I determine a value range for your property, I pull up ALL recent sales data in your neighborhood within a 2 mile radius focusing on the closest properties that are the most comparable to your home.
Here’s what I study:
- List price
- List price per square ft. vs sales price per square ft.
- Days on market for all sold, active and pending properties
- Number of houses for sale, pending and sold
- Houses most like yours
- Houses with upgrades, amenities and features “better” than yours
- Houses with upgrades, amenities and features “worse” than yours
- zestimate on your property and those most like yours
This is far beyond what Zillow is able to do for you.
Zillow and sites like it are not in the business of buying and selling property. They purchase information from native sources like our local MLS and feed it back to you, the consumer. There is often significant lag time in syndication and you, the consumer, are looking at old information- sometimes YEARS old. These sites share third party data diluted by regional information rather than up-to-date hyper-local sales numbers. That’s right, they purchase info from our MLS (a service Realtors pay a subscription for) then sell that info back to us (Realtors) in the form of ad space. This is the ONLY way Realtors can be shown as the contact on our own listings! So the next time you look at a “For Sale” on Zillow and you click “contact the agent” shown next to that property, 9 times out of 10, he or she knows NOTHING about that house and will have to consult the MLS to pull information for you.
That’s the problem with third party sites like Zillow. They spend a TON of money in advertising so that they’re the first name you think of, but they are not the real estate authorities and should never replace your realtor!
Zillow and sites like it are additional sources, but your Realtor studies the market, reads daily market reports, shows houses in your area and knows current comparable sales. Trust her experience and call her first! When you’re wanting to sell, why waste time? Go straight to the source- your Realtor.
-Jennifer
Questions? call me (615) 977-8444 or email: whereyoulivetn@gmail.com