Pricing homes …as a real estate agent it is one of the most important things we do. When I have a listing appointment there is only so much I can do before I see the home. If the home is a tract home, which here in Arizona, let’s be honest, most are, I try to find similar sales within the same neighborhood over the last 6 months. If I am lucky there will be exact model matches that have sold, and I will have a pretty solid idea of the range that the home I will be seeing should be priced. But I still don’t really know until I look at a million other factors where a realistic value might be. Where is the home within the neighborhood? How does the lot size compare, and how does the house sit on the lot? Is the backyard big? West facing? Or is most of the lot in front of the house and the backyard is actually tiny, with a two story home right behind it so you will never feel you have anything remotely close to privacy when you are in the backyard? Does the house back to a busy road? Does it back to an interior road, corner lot…maybe a cul-de-sac? Is there a pool? How usable is it? How well was it designed? Is there a decent side yard? Is there grass? Curbing? How well maintained is it all? Have sprinklers been hitting the block wall? How long? Is it deteriorating badly?
I could also go through all of the important factors of what I will see INSIDE the home…like upgrades and color choices, cleanliness, and decorating choices. Often there are a few changes the seller can make that will increase their market value…occasionally not. The point is…pricing a home for the market takes many factors into account. Sometimes I know a house will sell for more than it will appraise for…and handling that is tricky. Decisions need to be made by the sellers, lots of conversations are usually had before the house actually hits the market.
This is why Zillow’s Zestimates are so frustrating for real estate agents. I just put my personal home address into the system. I live in an older tract home, built in the early 90’s. There have been three very similar homes that have sold in my neighborhood in the last six months…and I looked at them all. I would say the Zestimate I got was about $12,000 low if I sold my house exactly as it is today, and $17,000-$20,000 if I do a few things. I am quite certain about this because of the age of my home and the neighborhood I live in, my house is easy to value. If I wasn’t an agent, and hadn’t been watching the market, I might trust the Zillow Zestimate and not understand the true value of my home. Sometimes Zestimates are way too high… not at all realistic…the market is no where near supporting what Zillow says the home is worth. To me, this is the worse situation. As a home owner I want to know realistically what I can expect to sell for so I know how much money I will have for whatever my next step is…my next home or my nest egg.
So why do Zillow’s Zestimates frustrate me enough to write this? Because Zillow is by far the most used site, and people trust it. Having to explain to people that their firmly held belief is incorrect is not a fun conversation to have. For those that think their home is worth more, it is a huge disappointment…and something they would rather not believe. It starts MY relationship with them with distrust and sometimes anger. It is not a way that I like to work, and I am sure it isn’t the seller’s top choice either. Now if they hire me, hopefully they trust me a little, and hopefully I can build the trust over time by doing what I say I will and providing great service. But often I won’t be given that chance…because of Zillow. And I hate that.
It isn’t only Zillow that does this. I could buy a service that does this as well and use it to bring potential sellers to my website and hopefully they would read my brilliant blogs and hire me with trust and admiration already in their heart. I see lots of ads for this service, great agents offer this service. I just wonder how they explain to people that the service they provided was really worthless. I value honesty and full disclosure desperately. Desperately? Yes…it is my favorite thing in pretty much any situation…even if the disclosure is something unpleasant…so I have a hard time offering people anything but exactly that. I suppose I could offer this service then have this conversation face to face…but I am still fighting the Zillow effect then…and I would have helped to create the problem I am whining about right now.
So what is your solution? How do you get an idea of what your home will sell for in the current market? Honestly…depends on what exactly you want. If you are just mildly curious and looking for a range, use one of the online services…usually they are within the range. But if you really want to know what your home could potentially capture in today’s market, call me. Often there are things you can do to increase your market value…from small upgrades, to painting, to maybe just clearing out some furniture and rearranging. You can’t know these things from an online estimate. Maybe your home smells from your cat, or when your father smoked inside it and you truly don’t smell it anymore. Maybe you didn’t realize a fresh coat of paint on your baseboards and doors will hide all of the scuff marks and dings that happened as your kids grew up …and your whole house will feel fresher, cleaner, and more new from that paint. I could go on and on with examples that could put more money in your pocket when you sell…but they will be unique to you and your home if I give you my market analysis.
Amazing many of terrific data.