In today's digital age, many homeowners turn to online tools like Zillow to determine the value of their properties. The Zillow Zestimate has become a popular go-to for quick home valuations, but its accuracy is often questioned. While convenient, Zestimates can miss crucial nuances that only an experienced local real estate agent can provide. If you're asking, "What’s my home worth?" here's why you might want to consider professional expertise over online estimates.
First things first, let's talk about why is it so important to have an accurate home valuation!
Accurate Home Valuation is SO Important
- Fair Pricing Creates an Easier Sales Process: Competitively priced homes tend to sell faster, and end up selling for a higher price. When a home is priced fairly it leads to more showings, more visitors, and therefore, more offers. Fair pricing combined with quality presentation (I can help you with both!) can create a bidding war scenario. As a home seller, this is where you want to be and teh data supports it. A 2018 Redfin Study indicated that homes priced slightly below market value (1-5%) received 50% more views and often sold for about 2.8% more than their list price.
- Overvaluing a Home Isn't Great: You do not want your home to be overvalued from an appraisal standpoint. Whenever a home offer is accepted, it needs to be feasible from an appraiser's perspective. I have had an appraisal come in low in the past... like really low. This is something that NO ONE wants right as a transaction is finishing up. While most lenders have a procedure to try and get the appraiser to reconsider their valuation and potentially gain back some of the value, the seller still may have to renegotiate the sales price. Not ideal.
The Limitations of Zillow Zestimates
First, I will acknowledge, of all the aggregated home valuations tools, Zillow does seem to do the best. BUT, Zillow Zestimates rely on MLS data, public records and recent sales in the area to generate an estimated home value. This approach, while useful for getting a ballpark figure, has several inherent limitations:
- Lack of Property-Specific Details: Zillow has never set foot in your home. It doesn't know about your recent kitchen renovation, the high-end finishes, or the custom landscaping that can significantly influence your home's market value. It definitely doesn't know about that one-of-a-kind zipline course you added for your kids in the backyard! All these things affect the value of your home.
- Local Neighborhood Nuances: Zillow's algorithm lacks a deep understanding of local factors that affect home values. These include the quality of nearby schools, the vibrance of local amenities, traffic patterns, and neighborhood dynamics. For example, a home in Kendall Yards which is a rapidly developing area with tons of newer construction might have a far different market trajectory than a "comparable" home in Spokane maybe 5 blocks northwest. These homes can be much older, may have less neighborhood amenities and geography makes accessing the nearby amenities of Kendall Yards difficult. It is hard for a Zillow calculation to adjust for all these factors.
- Data Limitations: Zestimates are based on publicly available data, which can sometimes be outdated or incomplete. And, the algorithm is different depending on if your home is off-market or on-market. If your home is off the market, Zillow will use tax assessments, previous sales prices, and other publicly available data to estimate its value which may not be that relevant in an ever-changing real estate market. If your home is on the market, your Zestimate is affected by your listing price, description, comparable homes in the areas as well as days on the market. To learn more about how the algorithm works, I found this article helpful.
- Timing: Real estate markets can be incredibly volatile. A Zestimate does not adjust quickly to sudden changes in market conditions, such as a surge in demand or a drop in inventory. There will always be lag time from when information is added on MLS to when it is live on Zillow. A real estate agent receives information from the MLS in real time, Zillow will never be able to do that. From a buyers perspective, hours or even minutes can be the difference in whether or not you get that perfect home.
Would you like to be sent real-time updates on a home searches that meet your criteria? I can do that for you! Get in touch with me here and I will set up a home search direct from the MLS to your inbox.
That tidy, original, unpainted (gasp!) 100-year-old trim & built-ins - You can bet your Zestimate isn't reflecting any of it.
Local Real Estate Agents Are More Accurate
If you find yourself Googling "free home value estimator," you may want to consider consulting a local real estate agent instead. Better yet, search Spokane's Best Realtor category in the Inlander and find Behler Homes as one of the top choices for 2022, 2023 & 2024. ;) Ok, but in all seriousness, here's why an established local realtor knows more than Zillow:
- Personalized & Real-time Market Analysis: Real estate agents provide a detailed Comparative Market Analysis (CMA) tailored to your home. This analysis considers recent sales of similar properties in your immediate area, the condition of your home, and unique features that might add value in real-time. Starter homes give us a great example of where a personalized market analysis is a game-changer for proper home valuation. Market inventory has been extremely low for starter homes for a number of years, but prices cannot increase too much as many of these homes tend to be smaller with less amenities. Let's say there were five comparable starter homes on the market at the start of summer that all sell quite quickly and all competitively priced. Zillow will base their Zestimate for starter homes on that data. BUT, if your starter home enters the market even a couple weeks later when there are little to no starter homes available, you can bet that a fair asking price might come in a bit higher than what Zillow can estimate based on past sale data.
- Expertise in Local Conditions: Agents have a finger on the pulse of your local area. They understand how factors like school districts, upcoming developments, and neighborhood trends can impact your home's value. This expertise is something algorithms can't replicate.
- Accurate Adjustments for Property Condition: Agents can make precise adjustments based on the condition and features of your home. Whether your home is newly remodeled or needs some TLC, a local agent can adjust the valuation to reflect these realities accurately. When representing sellers, I can adjust asking price recommendations down to the last second. Your estimated asking price recommendation a month out from your planned listing date might vastly differ from the final asking price recommendation. Especially if you put in tons of work to update and refresh your home in those last 30 days. Only a experienced real estate agent can guide you in valuing those updates.
Related: Revitalize & Refresh: DIY Home Staging Tips for a Quick Sale in Spokane
If you're asking yourself, "What’s my Spokane home worth?" it's time to consider reaching out to a professional. The combination of localized knowledge, market expertise, and the ability to account for unique property features makes real estate agents the best resource for accurate home valuations.
Know your Zestimate, but don't just trust it!
I'm definitely not bashing Zillow here, as I look at a Zillow Zestimate on occasion, too. But, Zillow, Redfin, Trulia, Homebot, etc... serve as touch points, not the full picture. The nuanced understanding and personalized service provided by a local Spokane real estate agent and YOU, the homeowner, are irreplaceable. Understanding the limitations of online valuations and the benefits of teaming up with a professional is crucial for anyone serious about understanding their home's worth while looking to sell or buy a Spokane home.
If you're curious about your home's true value, let's chat. By working with me you can ensure that your home valuation is precise, reflective of current market conditions, and considers all the unique features that make your home special. In a market where every detail counts, having an expert on your side is more important than ever.
