Perhaps you saw the news. Spencer Rascoff, CEO of Seattle based real estate media company, Zillow, sold a home. Maybe that part is not newsworthy, but this part is: he sold it for 40% less than the Zestimate displayed on the site.
There are several sites that us an AVM (automated valuation model). However, the following is true: these models are not sufficient when an accurate assessment of value is needed. The particular instances I’m referring to are buying a home and selling a home.
You see, these models pull publicly available data, crunch them together and spit out a number. But the model doesn’t account for several things. I know firsthand that an addition done to my house has not been reflected in Zillow’s pricing efforts. But other things, such as lot irregularity, condition/age of mechanical components, smell, and function of floor plan can be difficult to assess automatically.
Zillow can be a useful tool. But real estate agents sometimes must fight with these Zestimates. A frank discussion must be had when an agent tells a potential seller that their home is worth less than “what Zillow said”. And if a buyer wants to write an offer but uses a Zestimate as a guide, they may be way off base.
This is where a trusted agent comes in handy. Agents that work in the business every day know when an area is hot. They know to price a house in a subdivision differently than a farm. And guess what…they will usually consult with you for free.
With so much information available and shared freely these days, a good agent provides so much more than lists of available houses. Do you ever wonder why most houses originally marketed “For Sale by Owner” end up with an agent’s sign in the yard? It’s because the pricing, marketing, and transaction coordination are best handled by professionals. Consider this: an overpriced home is a great advertisement for your neighbor’s home that is listed for less.
For a true appraisal, which is necessary in many cases in the real estate world, you will pay several hundred dollars. But a good agent will give you a comparative market analysis and have an honest discussion of value (like I mentioned) for free!
Another problem with Zillow is that their database populates using information from the Multiple Listing Service, the database real estate agents typically use. But this data pull is not immediate. In a sellers’ market like we have experienced for some time now, a potential buyer will try to see a new listing that looks available, only to find that it is already under contract. Why? Because it sold before Zillow’s data could update.
Another service that an agent will provide is a custom search directly from the MLS. This data is fresh and immediate and gives people an edge. Buyers do better when a dedicated agent helps them find the perfect home.
Zillow has a place in the industry, but in a complex market, there is no substitute for human experience.
Reach out today!