Real Estate Q&A for June 1, 2014
We have been considering the sale of our home for a couple of years and are finally in the early stages of officially putting it up for sale. We have interviewed three agents and received three different prices, with a 10 percent spread. We are even more perplexed because our assessed value is less than all three realtor prices and our Zestimate on Zillow.com is more than all the other prices. The bottom line, we have 5 prices on our home and an overall spread of nearly $60,000. One of our friends told us that the Zestimate is the most accurate, but the Realtors say you can’t trust the zestimate value. I think you can see our dilemma. Thanks for any light you can shed!
— Ron, Grand Junction
One of the best questions ever! Zillow is, in my opinion, the best of all the real estate web sites at marketing to the public and to Real Estate agents. It has established itself as one of the “go to” web sites for helping the public not only keep track of local and national real estate happenings and homes for sale, but has also been effective at instilling the belief that it can help you establish a value for your home. The Zillow.com home valuation tool is called a “Zestimate”.
I encourage you to go to Zillow.com and click on the FAQ, frequently asked questions, and scroll down to the “How accurate is the Zestimate?” and click to open. What you will find is what very few know or ever venture to find out. Here you will find out how good the marketing has been. The marketing has been so good that the public has willingly flocked to a product that almost is wrong more often than right. In the terms of statistical accuracy a “Zestimate” is virtually worthless. Zillow.com admits that nationally that the Zestimates are accurate, within 10 percent only 64 percent of the time. That is plus or minus 10 percent, 64 percent of the time. Let that sink in — this means that if a house sells for $200,000 then there is a 64 percent chance that the Zestimate on that house fell between $180,000 - $220,000. I would suggest that a Zestimate is not very beneficial at establishing value. At Zillow.com it goes on to say that a “Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.” What Zillow.com is admitting, in the fine print, is that the Zestimate is not very accurate. Actually, statistically, it is amazingly inaccurate! There are too many variables, that don’t have to do with measureable and quantifiable characteristics, to allow a computer to provide an accurate statistical analysis on a home’s value. You should treat the Zestimate as a novelty figure, at best.
The assessors value has nothing to do with your homes real market value and according to the Mesa County Assessor’s Website, current values are “based on sales that occurred in the eighteen-month period from January 1, 2011 to June 30, 2012.” Based on those dates of analysis I would suggest that those would not do a very good job of establishing your homes current market value.
We have now established that the assessed value and the Zestimate are not good ways to establish your home’s value. That leaves us your three real estate professionals. You will have to put your trust in one of them and work with him/her on establishing your home’s current market value. At least now you know which values you can ignore for establishing your homes current market value. Hope this helped.
The Kimbrough Team
REMAX 4000 Inc.