Oh, I have heard those words so often! Nearly every listing presentation the homeowner has researched Zillow’s Zestimate and says, but this tells me my home is worth much more!
For instance, a recent homeowner looked up their address on Zillow and found the property was estimated at $450,000. But a recent search in the area for similar properties only showed homes up to $400,000. There was nothing over that amount in the area for similar properties. Trying to convince a homeowner that one estimate from one website is just not going to cut it is tricky, especially when that estimate looks very enticing. People always want to get the very most out of the sale of their house, so when you come in with an estimate that is far lower than expected, it can be frustrating. Many homeowners think that the real estate agent is just trying to get the home sold at the expense of additional profit for the homeowner.
This is simply not the case. Zillow’s estimates can be upwards of 38% off. They usually estimate much higher than expected. The reason for this is that Zillow doesn’t understand all the dynamics the going to pricing the home. They don’t know about the neighborhood conditions, the current condition of the property, any additional amenities that may have been added or removed to both the homeowner’s house and similar properties. Try to find a comparable property just looking at the numbers on paper is far more difficult than being in the house, understanding the micromarkets of the neighborhood or community and truly looking at the condition of the property versus similar comparable homes in the area.
There have been countless articles and posts about Zillow’s ‘Zestimate’. Many real estate agents simply hate the website but there are some that use it to their advantage, such as reviews or client sharing. But this estimate doesn’t just affect homeowners trying to list their property. It can also affect homebuyers. If homeowners insist on going with the higher estimate, homebuyers may not even find the property because they are searching in a price range that they can afford, not the inflated price. They may be able to actually afford the property when it comes to valuation but not at the homeowners inflated price.
One of the biggest pitfalls of pricing your home too high is when it comes to appraisals. Most homeowners will get financing to purchase a home and if the property does not appraise for the valuation given, the homeowner will either need to lower the price the home buyer will need to come up with the difference, something that is very rarely done.
Another pitfall is the homes simply will not get the views required to sell the property. Buyers do most of their shopping online before looking at home. If they look at the home and then look at comparable properties in the same price range they will not see similarities and therefore pass the home by.
The biggest take away from this is to trust your real estate agent. Ask your real estate agent valuable questions about how the price the property and how they came to the evaluation. If your real estate agent does the research, is proficient in your neighborhood and understands the market, chances are they will suggest an appropriate price range.
IF you want to know the TRUE value of your home, call us today! We can run accurate research and give our professional estimate of what your home is worth.