Whether you're buying or selling, you've likely checked out Zillow to look at homes and try to assess values in an attempt to demystify the real estate process. You've probably also noticed that Zillow offers what they call a "Zestimate" for homes in an attempt to provide consumers with the knowledge they need to sell their home for top dollar or to help buyers know how much they should pay for a home they're interested in. While Zestimates can be a good tool for starting a conversation of value, they are not a hard and fast number to live and die by. Here is how a Zestimate differs from your Realtors careful research and determination of price and value,
How Does it Work?
Zillow uses an Automated Valuation Model (AVM) to determine their Zestimate value. AVMs use mathematical modeling to calculate a property's value at a specific point in time by analyzing values of comparable properties. Zestimates are based on physical attributes, sales data of surrounding properties, and tax information. What Zestimates don't know is if the home has been remodeled, if the floors are in bad condition, or if the neighbor next door happens to have 12 abandoned cars in the yard. All things that affect the ultimate value of a property.
Accuracy
According to Inman.com, Zillow’s FAQs clearly explain that nationally, Zestimates are currently within 20 percent of the final sale price 82.5 percent of the time. This means that a Zestimate could be 20 percent higher or lower than a home’s actual value. When you're navigating a competitive market, a 20% price difference could mean getting top dollar, selling for too little, or pricing your home too high.
The WebMD of Real Estate
We've all been there - sore throat, cough, and body aches alert us that we might need to see a doctor. Our usual first step is to check out our symptoms on WebMD: it's quick and easy, but their algorithm can often lead us to self-diagnosing ourselves incorrectly. When it becomes serious and we want a professional opinion, however, our next step is to see a trusted doctor. Real Estate can be the same. Checking out the Zestimate of your home (or a home you're thinking of buying) is a good place to start while checking out homes at 11pm, but it's always best to consult a knowledgeable professional to ensure you receive the most accurate information.
Overall, buying and selling a home is a big. deal. When it comes to determining the value of your home, your Realtor is smarter than the computer and will provide you the most accurate pricing strategy. If you're thinking of selling, or if you're just curious as to the value of your home, give me a call, I'd be happy to meet with you and discuss pricing strategy. If you're interested in buying a home, let's meet up and see how I can help you find your dream home (and not overpay!)