Zillow Values vs. Sale Price is a frequent question in the real estate industry. More often than not, buyers and sellers alike refer to this heavily advertised, widely popular resource. Buyers look to see if the home they want is worth what’s being asked and sellers look to it determine what they could potentially get out of their home if they decide to sell (and perhaps upgrade). It’s so common, that a “Zestimate” is a commonly recognized term. It leaves us real estate professionals wishing we were too (can you imagine getting your own Candis-stamate? LOL!).
I feel like these computer-generated, automated valuation models (AVMs) like Zillow are a good jumping off point for evaluating price. By their own disclaimers, “the Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a house will sell for.” They go on to show that the estimate can vary from the sale price as much as 20%! That’s at least within the ballpark, so consider it a start. …but +/- 20% in dollars and cents can translate to tens of thousands of dollars left on the table as a seller if you undervalue your home. Or it could equate to losing your shirt as a buyer because you paid 20% more than the home is worth (putting you on the very high end of the appraised value).
Adjusting for the Zillow Values vs. Sale Price
So these estimates are definitely not the end-all be-all of establishing what a home is worth (priceless, I know, but you gotta be able to pay something, right?). This is where we real estate professionals come in. We add layers to the story to provide the most accurate picture of a home’s value. Since “the machines” haven’t actually seen your house (inside or out), and they don’t know the neighborhood and market nuances, how could they give you an accurate estimate?
A good real estate agent will not only look at historical records for what recently sold in your area, they’ll go a step farther to look at what your current sales climate looks like to ensure your price is competitive. They’ll know what else is currently active for sale and how quickly similar homes are selling and above all.
Obviously, you want to get as much as you can for your home when you sell (and you don’t want to overpay when you buy). As a real estate professional, I pride myself on looking beyond the basic number crunching and models to determine a true value for your home (or the home you’re purchasing).
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I’m going to start making it a “thing” to post some Q & A videos to my YouTube Channel each week addressing the most common questions I’m getting lately. Be sure to click here and subscribe to my channel so you get notified when new content is posted!