An old adage in real estate sales is “your home is worth what someone is willing to pay for it.” This suggests that there are many different factors that go into determining the value of a home.
In today’s internet savvy world, many look to industry leader Zillow for information. But the questions is, “Should I Trust Zillow to Determine My House Value in Murfreesboro?”
The short answer is NO.
Don’t trust Zillow when trying to determine the value of your home. Here’s why.
Should I Trust Zillow to Determine My House Value in Murfreesboro
Zillow’s Margin for Error
Zillow’s margin for error 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 $300,000 home, a 20 percent deviation is $60,000! For higher-priced markets like Los Angeles or Miami, a $1 million home could see unrealistic estimations varying from $180,000 to $200,000 or more. That’s huge! No way should you ever trust a source with this much variation..
Zillow estimates could discourage potential buyers who might think a home is well out of their price range while giving sellers an unrealistic expectation of what the house may possibly sell for. This can often be the starting point of disagreements homeowners are having with selling agents regarding what the house should be listed for.
Simply put: uneducated homeowners see the price on Zillow and think that is what the house should sell for.
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 house.
Their formula looks at the market pricing in the area. It will factor in the size of the house, the lot and features of the home such as the number of bedrooms, bathrooms, pools and highlighted features. However, even Zillow will say this is a starting point for a true valuation of your home and should not be considered an appraisal or true value.
The reason is the information Zillow uses is reliant on accessing 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 that is the pride of the neighborhood.
Zillow doesn’t discern community pockets. These are very common in larger cities where you can have higher end community just blocks from a mid or lower-end one. These “pockets” can skew or be skewed by larger metro data that Zillow factors in that aren’t even pertinent.
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 expectation more difficult.
A realtor will take a look at sales in that area, creating a radius based on your pocket rather than an entire zip code. He will then compare your home based on size, features, and upgrades to those homes that were recently sold, thus appraised, in the previous 3 to 6 months depending on current market conditions.
He will then compare this information to existing homes on the market, looking at how your home compares to what else buyers are seeing on the market. After all, if yours is a well-kept home being sold next to a completely remodeled home, you might not be able to get the same price per square foot at the other.
The next thing he will most likely do is suggest a home inspection followed by a list of costly repairs so you can sell your house for more. But when you consider all the time and effort not to mention money involved in this plus the fact that you will be giving up even more money to the agent in the form of commissions, is this the smart thing to do?
There Is A Better Way
If your house needs work and you are looking for a quick hassle free sale there is definitely a better way! Call Provision Homes LLC at 615-310-1909! We have been in business over a decade here in middle Tennessee and know this area well. We are known for making fair cash offers based on the After Repair Value of the house. Visit our website and check out our home buying process!