As a result
of the recovering real estate market, homeowners are wondering what the current
value of their home is. In this day and
age, the first thing most people do is to start googling and they’ll find a
plethora of what we refer to as on-line home evaluation web sites.
Some of the
most popular and common sites are Zillow, Trulia and Smartzip. Zillow has even come up with their own term
of “Zestimate”. Sometimes these methods
are useful but, in reality, they can only be somewhat accurate if you live in a
cookie-cutter neighborhood in which the homes were all built the same time and
have the same features with the same views.
All of these
on-line evaluation sites use averages from computer based systems that simply
take the information for a particular area either from public records or our
Multiple Listing Service otherwise referred to “MLS”. The computer program then uses the
surrounding homes as comparables and therein lies the problem.
In most
neighborhoods there are homes that may even be as close as next door, with the
approximately the same sq footage but one of the homes has been totally updated
and the other home is all original. Obviously, they are not worth the same in
the real estate market. Another common
occurrence in our area is there are homes on one side of the street are
waterfront and the other side non-waterfront and naturally the sq footage price
would differ immensely but are counted as part of the numbers to average for a
particular area.
According to
Zillow’s website Pinellas County gets 2 stars for their ‘Zestimate Accuracy’
and it uses the following figures to back this statement up: out of the 429,000
homes in Pinellas County with Zestimates, 29.3% are within 5% of the Sale
Price, 49.5% are within 10% of the Sale Price, and 77% are within 20% of the
Sale Price. While these figures don’t seem that bad, you have to think of the
other side of these statistics. If 29.3% of the Zestimates are within 5% of the
Sale Price, that also means that, for an average $300,000 home, more than 70%
of the time the Zestimate will not be in a $15,000 rage of the true value.
Also, if 49.5% are within 10% of the Sales Price, for an average $300,000 home,
more than 50% of the time the Zestimate will not be in a $30,000 range of the
true value. Herein lies the biggest downfall to these home valuation websites.
The best and
most accurate way to get the true value of your home is to ask your real estate
professional to prepare for you a Comparative Market Analysis, also known as, a
CMA. While taking the time to prepare your CMA, your agent then gets a chance
to view your home and observe any upgrades and additions you may have made to
your home over the years which would add value to your overall home valuation.
Your agent will also compare current listed properties, properties that are
pending under contract, and sold listings. Knowing the true value of one of
your biggest assets is vital in today’s real estate market. Call me today for
your free CMA report.
Melissa Yardy
Real Estate Consultant
President Broker-Owner
RE/MAX Preferred
