Realtor Price Opinion vs Zillow
Recently a local news outlet published an article called Zillow vs Reality. According to the research, done by Tri-City area Realtors, Zillow’s Zestimates (their price estimate) of Tri-City area homes are off by more than 5.5%. On a $300,000 home this error, which was nearly always too high, had homeowners thinking their home was worth almost $17,000 more than the public would pay for the home. According to Zillow their error rate is a little more than 2% so their local error rate of +5.5% is well above their expected margin of error. Homeowners should compare a Realtor price opinion vs Zillow.
What Does This Mean to Homeowners?
Well the first thing this means for homeowners is if you use the Zestimate from Zillow do so with a huge grain of salt. The Zestimate appears to be a “wish” price. As in, “I sure wish my home gets THIS price!” Pricing a home too high means less likelihood of getting an offer in the first few weeks on the market. The first few weeks are when the home gets the most attention from buyers. Trulia offers 8 reasons not to “test” the market with a high price. An experienced Realtor should be able to hone in on the right price.
The Right Price
Why can a Realtor do a better job than a tech giant’s algorithm in determining the right price? Local agents know the subtleties of the market including which segments of the market are red-hot, and which are a little cooler. The red-hot homes will often get multiple offers which can drive up the sales price. Realtors also use a combination of tools to determine the right price and compare active listings, which may be at the “wish” price, to homes which have sold. Local Realtors also know which neighborhoods are highly desirable to buyers. Homes in those neighborhoods often sell for a little bit more than the same home in another nearby neighborhood. An experienced Realtor also knows what is happening locally with hiring, job growth, and folks moving in for retirement. These trends would be hard for an algorithm to factor into the home price.
Bottom Line
Trust someone with experience. Ask how they determined the price they are recommending. When I prepare a price opinion I include:
- the active listings which are the competition for their home
- pending and sold homes and how long each was on the market
- positives and negatives about their home and the ways we will capitalize on the positives and mitigate the negatives
- estimate of their proceeds from the sale
Want to know how the Realtor price opinion vs Zillow stacks up on your home? Call me anytime. There is no cost for a price opinion!
