It is estimated that nearly 90% of consumer’s use online tools to shop for and determine home values. Tools such as the Zillow Zestimate® provide estimates on home value, but how accurate are they? The professionals at The Donnelly Group provide you important information to consider.
Competitive Market Analysis (CMA)
An experienced Seller’s agent is, by far, the best route to obtaining an accurate assessment of your home’s value and determining the best list price for selling your home. Your agent should be able to provide a CMA which takes into account economic conditions, recent comparable home sales in the area, your home’s most sellable features, and your agents’ unique knowledge of the local market.
Behind the Zestimate®
According to Zillow.com, “The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value…Zillow uses an algorithm to calculate a housing estimate using current market information and home specifications. However, no matter how sophisticated an algorithm might be, there is no way for it to accurately gauge the value of new home renovations, staging efforts, and other intangible factors.”
This is where a Seller’s agent can be invaluable and can never be replaced by an algorithm. In addition, “the Zestimate® is calculated from public and user-submitted data.” What this means is that homeowners can edit their home facts. The Donnelly Group believes that an unbiased party, such as a real estate agent or appraiser, is the only party that should influence and edit home values, not the homeowner.
In addition, it’s important to note that “the Zestimate® has a median error rate of 7.9%.” This means that a homeowner using a Zestimate® to determine their listing price may list their home at $400,000 when the actual value may be $30,000 (or 7.9%) less or more. This could be the difference between a house that sits and one that sells.
Can a Buyer’s Zestimate® of My Home Work Against Me?
Today’s tech-savvy buyers will likely have researched your home extensively before making an offer – including gathering information from Zillow. Buyers might feel empowered by this “data” and argue your price down according to your Zestimate®. This is where having a Realtor is a tremendous help for both you and the buyer. Real estate agents know that in an actual real estate transaction, the appraisal is the only credible source to establish the value and loan amount in a real estate transaction. Most experienced agents understand that a Zestimate® is not a viable negotiation tool and they should be able to educate the Buyer as well.
Contact the experts at The Donnelly Group and put their knowledge and experience to work for you. They are devoted to being your guide, your expert, your resource, your advocate.
Don’t forget to check out our latest guide: 10 Ways To Sell Your Home Quickly