Should I Trust Zillow to Determine My House Value in Raleigh

Should I Trust Zillow to Determine My House Value in RaleighAn old adage in real estate sales is “your home is worth what someone is willing to buy it for.” This suggests that there are many different factors, some arbitrary that go into the valuing of a home.

In today’s internet-savvy world, many look to industry leader Zillow for information. But the question is, “Should I Trust Zillow to Determine My House Value in Raleigh?”

No.

Don’t trust Zillow for valuing your home.  Here’s why.

Should I Trust Zillow to Determine My House Value in Raleigh

Zillow’s Margin for Error

Zillow has been reported to average anywhere from 18 to 20 percent higher or lower in-home estimates. There are even reports of home values on Zillow climbing in declining market areas.

Let’s think about this for a second. For a $200,000 home, A 20% deviation on a $200,000 home is $40,000. Higher-priced markets, such as Los Angeles or Miami, may see unrealistic estimates ranging from $180,000 to $200,000 or more for a $1 million home. That’s a significant price difference.

Estimates from Zillow may discourage potential buyers who believe a home is well out of their price range while providing sellers with an unrealistic idea of a selling price point. In the end,

this is the starting point for many disagreements between homeowners and selling agents about how to properly price a home.

Simply put, homeowners see a listing price on Zillow and believe it is the starting point for their home.

How Does Zillow Create Estimates

Zillow calls its proprietary estimating tool a “Zestimate.” Even with all the pricing factors placed into the formula, there is still a high margin of error because Zillow isn’t actually looking at your home.

The proprietary formula considers the area’s market pricing. It will take into account the size of the house, the lot, and all of the home’s features, such as the number of bedrooms, bathrooms, pools, and highlighted features. However, even Zillow will tell you that this is just a starting point for determining the true value of your home and should not be considered an appraisal or true value.

The reason for this is that the information Zillow uses is based on public records and user input, such as realtor sales. However, Zillow cannot discern if your home is the dilapidated eyesore in the community or the completely redone and upgraded home everyone is envious of.

Additionally, Zillow doesn’t discern community pockets. These are very common in larger cities, where a higher-end community can be found just blocks away from a mid- or lower-end community. These “pockets” can skew or be skewed by larger metro data that Zillow considers but isn’t relevant.

The More Accurate Model

Any professional realtor will tell you that pricing a home to sell requires a full understanding of the home itself, the location, and current market trends in that area. In fact, most realtors look at Zillow pricing with a bit of disdain because it does make pricing and managing realistic client expectations more difficult.

A realtor will look at sales in the surrounding area and create a radius based on your budget rather than an entire zip code. He will then compare your home to those that have recently sold and thus appraised in the previous 3 to 6 months based on size, features, and upgrades. This range is determined by how active the local real estate market is.

He will then compare this information to existing homes on the market, examining how your home compares to what else buyers are seeing. After all, if you’re selling a well-kept home next to a completely remodeled home, you might not be able to get the same price per square foot at both.

Realtors will also consider whether it is a buyer’s or seller’s market. In a seller’s market, you can underprice the home and let the bidding begin if you want to create a frenzy with a lot of eyes on it. This strategy works in a variety of markets, including [market city].

IF YOU ARE LOOKING FOR A FAST WAY TO SELL YOUR HOME, GIVE US A CALL AT 984-689-9785 OR FILL OUT OUR ONLINE FORM TODAY!

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