The best way to explain it is that there is a zestimate by Zillow and the zactimate by the Agent. The spread I believe I have read can be fifteen percent. The computer Modells are interesting but the Agent analysis gives you the real deal numbers in the local market that are needed.
SELLER FAQ: Realtor CMA or Zillow Zestimate®?
Why is my Realtor using their own comps to price my home and not the higher estimate I was quoted from Zillow?
That is a great question!
With the introduction of several aggregate real estate websites years ago, some home owners started bypassing Realtor suggested listing prices when they blindly trusted what I oftentimes thought were inflated, overpriced home value estimates from websites that appeared to use computer generated models and formulas to determine home value estimates. When it was later discovered that a home’s worth required much more than a simple mathematical computation, some of the same real estate sites settled on extreme range pricing to determine a home's potential value. Some had/have ranges with a margin as high as 15%. OUCH! Do the math on that one. Can a seller afford to potentially be off by 15% on pricing a home? What if the formula prices it at $400K? That's $60,000 the seller could potentialy over-price or under-price their home! Really?
When a seller prices their home too high, it can result in little to no buyer showings which equals little to NO OFFERS, ultimately forcing the seller to drop their asking price (multiple times in many cases) in a late attempt to grab new home buyers and recapture the old ones already lost – creating a “too little-too late” scenario with the latter. On the flip-side of that coin, when a seller uses an estimate that prices their home too low, it can rob the seller of thousands of dollars they left on the table that could've been counted towards their net proceeds.
WHEN SEEKING A MORE ACCURATE IDEA OF YOUR HOME'S POTENTIAL VALUE, CONSIDER THE FOLLOWING:
INSIDE HOME TOURS - A Realtor has most likely toured the actual home that needs the valuation! In many cases, some of the other competing homes as well. Can a generic website do that? With that invaluable knowledge of size, feature and condition of the competition, it is my strong opinion that a Realtor CMA over a Zillow Zestimate® can best determine a competitive listing price for their client.
LOCATION: A Realtor will most likely have a better understanding of the positives and negatives of a home’s location when it comes to effectively pricing it against its competition, the same cannot be said for a generic website. How can a computer website understand that although two nearby homes may have similar square footage, floor plans and features, there may be many other factors involved that could decrease or increase the desirability of the home to buyers ultimately affecting its pricing such as high/low ranking school boundary lines, alley or noisy establishment abutment, main thoroughfare, freeway noise compared to a quieter residential street, just to name a few.
MARKET CONDITIONS: A local Realtor will most likely be aware of the market conditions in the area of the home they are valuating than a website that's based in another area and in most cases another state! As a BUYER if you lowball in a multiple offer seller’s market your offer will not be taken seriously. On the flip side of that in the same type of market, if your offer price is too high and the home doesn’t appraise, you could be asked to make up the price difference in hard out-of-pocket cash. Yikes! As a SELLER, if you price the home too high in a high inventory buyer’s market and/or do not allow wiggle room for seller concessions, you could get stuck with the home a lot longer than you planned potentially costing you thousands.
CMA’s ARE NOT JUST A PRETTY FACE: As you have read, it is no simple task determining a home’s value. Most of the same generic real estate sites now advise buyers and sellers in their disclaimer remarks to use their site's estimates as supplemental information to a real estate professional’s CMA before listing or making an offer on a home. So…in answer to your question as to Realtor CMA or Zillow's Zestimate®, it is my professional opinion that when trusting your most important investment, it’s best to leave it up to the humans, a real live experienced Realtor®.
When you are ready to schedule a home tour to get a more accurate estimate of your home's potential value, do not hesitate to call me at 310-508-4354. Or you can start the process by simply filling out a free 5 min CMA at AndiGrant.com and I will be sure to contact you shortly.
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