Why a Real Estate Agent’s Home Value is better than a Zillow Estimate (ZESTIMATE)
—->> Clicking on the home value links in this blog post will take you to a 15 second home value estimator. It is powered by Zillow. You’ll receive a notice from us explaining why our custom valuation in person is better, yet you are welcome to make your own comparison. Remember, the market actually set the price, not Zillow nor your agent. Your home is truly worth what a buyer is willing to pay for it.
The internet has made loads of information on real estate available to consumers. From listing, advice on buying and selling, viewing, pricing calculators, and so much more, you can find just about anything. Most people use the Internet to obtain an estimated value of a property. Property valuation is important in real estate financing, listing for sale, property insurance, taxation, buying, and investment analysis. Zillow is a rental and real estate marketplace that provides great resources. One popular tool by Zillow is the free automated valuation model. Although the logic used by Zillow is similar to that of a real estate agent’s, the two use different evaluation methods, and their results differ as well. It is easy to get the basic information on a home value but who should you trust if you want an accurate value of a home. True real estate agents? Zillow?
The Zestimate is an estimated property value by Zillow obtained using a computer-generated valuation model. Zillow uses public records and user submitted data such as the property’s features. The site knows how much a home sold for, the last time it was purchased and has similar information for other homes in the surrounding area. It uses automated valuation models together with several algorithms that include property tax assessments, and recent sales, to determine the value of a property. The data is tossed into several equations, to predict the value of a property within a neighborhood. The Zestimate cannot replace a comparative market analysis by a real estate agent, and its results cannot be used as a basis for any real estate transaction.
Real estate agents are skilled professionals with substantial knowledge of the local real estate market. They conduct physical inspections and consider important values such as the demand and supply forces, prices of similar properties in the neighborhood, a property’s current state, and other factors to provide a home value estimate. Real estate agents have access to the fresh sales data and will give you an estimate that is in line with the market. Whether you are obtaining a mortgage, refinancing, selling your property, leasing, or buying property, you will need to get an accurate home valuation. Most people rely on the internet for information because it is fast and convenient. However, convenience does not always lead to accuracy or reliability. While Zillow provides helpful tools for buyers, sellers, mortgage professionals and other people, its valuation tool often gives consumers unreliable information. The Zestimate is actually a roughly calculated value, based on the input data and, therefore, less accurate than it looks. If you put in wrong information, the estimate you get will be incorrect. In fact, Zillow acknowledges that the Zestimates may not be accurate. These values are sometimes wildly off, leaving consumers worse off than before they used the tool. Whether you are a buyer or seller, you cannot afford to be off by thousands of dollars in your bidding or pricing. Zillow may have done its best to ensure consumers get the closest estimate possible, but the truth is that it is only an automated system that cannot think on its own.
Agents are better informed than the consumers and will exploit their skills and experiences to provide a realistic home value estimate. The market trends change frequently and vary from one neighborhood to another. He takes note of the location, physical features, market condition, and an application of specific methodologies to give an estimated value. A true real estate agent will pick up on the latest market trends faster than the automated algorithm and thus, their estimates would be more accurate than Zillow’s. Inaccuracies in the Zestimates can result from outdated data or incorrect information. Some people may find it hard to use this tool, and those who are not familiar with evaluations have higher chances of making errors. These inaccuracies can also result from Zillow’s heavy reliance on the aging factor and a statistical dollar per square foot formula. The site may have important data, but it might not be enough to tell accurately how much a property is worth. The Zestimate tool is not able to determine the actual condition out and inside the home. It compares a property with others based on the features presented in the public record instead of the actual features in their current condition. An agent physically inspects the home taking the property’s current state of into account. Real estate agents conduct a thorough analysis of properties and use well-planned strategies to estimate appropriate figures. She will judge subjective housing conditions that may affect the value such as upgrades and additions.
If a comparable is in an inferior condition, she will ensure adjustments are made to reflect this. You cannot attain a complete level of accuracy without actually visiting a property and using the human touch to filter through sales information. Being an automated tool, the Zestimate does not know the essential factors that could affect the property value. A licensed agent will help you understand how these unique characteristics can influence the actual value of the property. A competent real estate agent has the expertise to compare entirely different homes within a neighborhood to get an accurate value, and the Zestimate does not have this kind of ability. Comparable sales are a valuable tool in determining a property’s value, and Zillow does not use it as it should. Sometimes, what the Zestimate may use as a comparable may not necessarily be a comparable. For instance, it uses every home in the area whether comparable or not, to give an estimated value. Realtors® understand how one comparable sale relates to the other. A real estate agent will give a closer look at the current sales and only uses 3 to 5 homes in each status (generally sold, under contract, and available) that best compare to yours to come up with a value.
The data used by Zillow in regards to the physical location is much broader that just your town or neighborhood. Zillow often uses all the data in a county to come up with the Zestimates, and this is another reason the Zestimates may be far off. The value of properties in a county vary tremendously. County records in many states do not indicate additions or newly finished houses and so, by using such data, Zillow’s estimates are likely to be less accurate. Also, if a home is new and in a good condition but in an older neighborhood, the chances are that the public records used by this estimator will be inaccurate. A true real estate agent will find out the actual location of the property, and obtain the most accurate information. It is important to note that a computer does not recognize similar market areas. An example of such areas is the school districts and many areas, the value of a property is determined by the school district in which it is.
In addition to giving you a home value estimate, real estate agents also provide valuable services and advice that can help in marketing, listing, and negotiation and a computer-generated tool can never replace that. Although the Zestimates give you a picture of how much your home may be worth, no algorithm can beat the expertise of a real estate agent. Although Zillow claims to have some procedures for human input on their valuation, the truth is that this is a temporary and limited aid that may not rectify an incorrect estimate. Also, human input could be subjective and may end up altering the results hence reducing the integrity of this tool. Your licensed agent will provide an unbiased price valuation. For sellers, having an accurate price evaluation prevent you from listing your property too low and potentially leave money on the table or listing it too high making it remain on the market way longer than it should. A home value estimate provided by a person will be more accurate than an estimate by Zillow and other similar websites. With that in mind, it is evident that Zillow cannot draw comparisons the way a real estate agent would and, therefore, it is clear that a home value estimate from a professional and local real estate agent is better than an estimate.
Zillow offers an important tool that can be used as a starting point, but its figures are not accurate and sufficient enough to help you make a housing decision. It will require a lot of improvement before it can offer real benefits to consumers. The surest way to get an accurate value of a property is to have it evaluated by an agent in person. With an in-depth market knowledge, designations, education, and experience, real estate agents are the people you should trust to give you an accurate estimate. You can be confident that they are highly qualified, ethical, and ready to assess a property professionally and with good judgment.
Ballen Network has licensed real estate agents offering custom home values anywhere in the nation!! Call us at 1-800-805-8354 or click to use our Find an Agent Form.
Article by Lori Ballen REALTOR®