Admittedly, I ask this question w/ some optimism; I’d like to be rid of this house (too big for m) and to sell it for a healthy profit. But I suspect the recent listing prices are overly optimistic, even for those people w/ little connection to reality, real estate agents.
Two houses on my street, sharing my ZIP code (84075 for those who want to poke around) and roughly the same age as mine have gone on the market in the last month for nearly double the square footage price paid for my house 5 years ago. Now, the economy IS in far better shape and this city’s schools have become quite popular in those five years, I’ll grant that.
But those two houses haven’t sold and I’m afraid that if I tried to list mine at a similar price it would only end in disappointment and wasted resources.
Is it reasonable to believe those home prices are nearly realistic?
I should point out we’re a bedroom community for a local air force base, eBay, Overstockdotcom and Adobe. But Silicon Valley we are not.
Realtor here. It is reasonable to believe that it would only end in disappointment and wasted resources. Price your house to sell and it will. How many years do you want to dick around?
The usual realtor schtick is to sell you on the idea of getting a high price to get your business, then once they have it, to start talking you down to make the sale. The greatest saving you can possibly make is to avoid the obscene percentage that the cartel of realtors charge. If you’re in a hottish market, look into selling it without a realtor. You can usually pay someone a small fixed fee to put it on MLS. Even then, it’s hard to avoid paying the buyer’s broker, but at least you save half the money.
if you do use a realtor, when assessing price I’d insisting on seeing the raw data on actual sales that have occurred in your area. Often it’s quite hard to obtain in aggregate form if you don’t have access to MLS. Even so, you’ve got the problem that a dishonest realtor (also known as a “realtor”) may cherry-pick the “comp” data, so it’s tricky. For some areas, comp sale prices are easily accessible, for some not. Obviously you need sales prices in conjuction with Zillow or something so you can look at the condition and features of the house.
A little over a year ago, I re-fied this place.
As part of that, I paid for a real Assessor to measure, photograph and calculate, after finding lots of comps in the same 10 block area.
His number was within 2% of the “Zillow Estimate”.
Price your house at 5% under the Zillow, and it should sell quickly.
I have not yet fed your zip into Zillow, but will.
Pay attention to the yellow dots on Zillow (see the “Listing Type” pull-down) - those are properties which actually sold.
We priced ours on the low side and had two offers the first day, one of which we accepted.
We knew it was low, but we told the realtor we would rather get less money and have a quick sale, so that’s how we decided on a price. We lived in a small, rural, town with a declining economic base, so we were worried about that, too.
If you price it correctly, it will probably sell quickly. You have to decide how long you’re willing to have it sit on the market.
It’s “appraiser”. An appraiser may be worthwhile, but if you pay the money, I’d insist that a condition is that as part of the deal you want to see the raw data of all sales that have occurred within certain parameters (locale, size, list price, sale price). it’s just useful to get a feel for what’s going on locally, and you may just have a better sense of the local situation yourself - “oh, I know why that house sold so cheap”.
No, be very cautious with this. The “Zestimate” algorithm is pretty good, and reliable for “cookie cutter” properties in high-volume markets, but it can in some cases be wildly off. Think about it, would you buy a house unseen? If not, why not? Because the intangibles that are hard to quantify as listing data can affect its value by a huge amount.
Zillow is, of course, extremely useful because it often retains the pictures and description of houses that have sold, which is enough information (if you have sale prices) to assemble a set of comps, because any intangible valuation factors will tend to net out by the law of large numbers.
Where I live the county has information online for every piece of property. I can go to the county website and find the last sale price for every home in my town.
I’ve been noticing a trend in my town: Our town taxes property at 101% of appraised value, so knowing how much the house is taxed for gives you a decent guess as to what it’s worth. Over the past year or so, I’ve seen at least a dozen houses listed at 40k over tax appraisal. Then they sell for…within 3k of the tax appraisal. I don’t really understand the game, but they’re not ending up ahead by overpricing their houses, yet the local relators are still consistently putting them on the market much too high (consistently given this is a very small market, with only 30 or so not-brand new houses or trailers for sale over the year).
Right; for example the highest priced house has a garage, which mine does not; here in Utah that makes a difference. And this house listed for $40K less in 2015 and sold in a month or so. It’s been listed 4 days and has only outside photos, which seems odd to me.
Just chiming in here - I was in a conference a few weeks ago that Zillow presented at, and they specifically spoke about the Zestimate - their Data Scientists get some absurd level of accuracy in the Zestimate when compared against actual sales prices, which I can’t remember precisely at the moment, but think in the 2%-5% range.
That tells me, as a first-pass estimator, the Zestimate is indeed very safe, and you can dig in and do your due diligence in the photos for any that seem unnaturally high or low.
It doesn’t tell me that at all. There’s a lot of danger focusing in on the mean (or median) as it can obscure a lot of what is happening at the margin. As an example, it’s possible for the mean selling price and mean zestimate of sold homes to be within a couple percentage points, and for 50% of homes to have more than a 10% error in their zestimate.
To be convinced, I’d like to see a histogram of reasonable error bins to understand how close they’re getting for most homes, and I’d like to see it broken down by geography, home value, and home type (house/townhouse/condo, etc), to understand where their errors lie. Ideally, any analysis should also be done by a third party who doesn’t have any incentive to mislead.
I also assume they have some algorithm to discount sales that are happening at non-market price (like if you ‘sell’ your home to a former spouse in the process of a divorce, the price you negotiate, which is recorded with the county, is not the true market price of that home, and it’s proper for zillow not to count that as an error versus their zestimate.) However, it’s not always obvious which sales are non-market sales. It would be easy to simply conclude that anything that sells for under x% of the expected price is a non-market transaction, but that would exclude cases where the zestimate is most wrong. So I would want to understand better how they account for that.
Zillow has, if you scroll down a bit, a “Price/Tax History” pull-down on a specific house.
I have seen properties in which this data is blank, but it almost always has a chronology of “Listed” and “Sold” data - both list prices (and changes to list price) and sale amounts.
This is why the yellow dots (sold) are a treasure - these are the comps an appraiser will find.
You can get the same data free.
Out of curiosity, I just checked my house. Zillow lists it as: 3BR, 2BA, 2300 sq ft. on a .24 acre lot. It is actually 4BR, 3BA, 2700 sq ft. on .34 acres. (so much for Zillow accuracy)
Do tax assessors use Zillow as a basis for their value estimates? I’m hesitant to correct Zillow’s data. I fear it might earn me nothing but a tax increase.
Google your county name + ‘GIS’.
Pretty much every county has this information on-line. You can look at a map and drill down to click on individual properties to get the tax information, which will list general information about the property, the taxes paid and almost always the last sale date and price.
My 80 year old father took us, his three children, on a trip up to northern Minnesota a couple of weeks ago to drive past the farm he grew up on, the school houses, etc. When we got back, I sent him a link to the county GIS so he could look at the satellite map and click on the farm (now in 4 parcels) and other places he knew to see who owned them now.
Always useful. “Hey, Bob and Susan sold their house! I wonder what they got for it!”
No, assessors don’t use Zillow. Each state or county (depending on who administers assessments) has their own legally-prescribed methods to establish assessed values, and they use formulas. They don’t surf Zillow or Trulia. Actually, it’s the other way around, as Zillow’s and Trulia’s inputs largely come from realtor listings and assessment data, which can range from good to lousy.
Zillow and Trulia can be informative, but data and value estimates must be taken with a grain of salt. These websites can be fairly accurate in homogeneous, suburban neighborhoods with a lot of sales, but are far less reliable in rural and urban areas, or where reliable assessment data is hard to come by. I live in a state where each county maintains and conducts its own assessments, and each county uses different techniques, computer programs and public access. All-in-all, not very friendly for Zillow and Trulia.
I live in a rural area with poor/inconvenient assessor data access, and just checked several houses near me that sold recently. The Zillow estimates were mostly more than 10 percent off the recent sale prices, in some cases more than 20 percent off. They have my house - which is atypical for the neighborhood - at probably about 50-60 percent of what it is worth. They have my nephew’s house as a two-unit property, which it is not. They have two nearly identical houses on the same street at $78k and $143k.
Trulia doesn’t give value estimates anymore, but you can look up homes that sold or are for sale.
+1. I’ve found Zillow to be reasonable as a first check, but, at least in my urban neighborhood, they not uncommonly have incorrect square footage and bedroom/bathroom/etc information about houses. Some properties when compared with Redfin’s estimates can vary by as much as 30-40% in price. I do find their price-per-square-foot estimate to be in the right ballpark, though.
The local realtors don’t set the price, the sellers do. Many, many, many sellers have an inflated idea of the value of their property, and ignore the realtor’s advice. After a while, they realize it’s too high and come down.
The one thing that annoys the shit out of me to this day is how comps are computed. They are blindly averaged prices of sales of similar type houses. Sounds logical, right?
How about this scenario: You and a neighbor both own (for our purposes) identical houses in identical condition. For fun you check for comps in your area and the number comes up $300K. You both own your houses outright. Your neighbor loses his job and finds a new position in another state and has to dump his house quickly. Since he’s in a hurry and bought the house eons ago for $75K, he prices his house at the ridiculous price of $150K. It sells within hours, since it’s a steal.
You decide you’d like to move too. The real estate agent comes and lo and behold you don’t have a $300K house anymore. The low-ball one-off sale fucks the value of your house. Never mind that before the neighbor dumped it, houses like yours were going for $300K. This one-off now taints the market, and now people expect to get your type of house for a lot less because one guy who only owns one house decided to dump it.
Sorry, but I don’t see this as logical or even proper. The dumping was just that, a dumping, not an indication of a down trend in an area, no toxic dump was found in neighborhood. There aren’t going to be any more “bargains” in the neighborhood, it was a fluke.
If I sound bitter its because something like this happened to us. I’m still pissed off.
Where in the world did you get this idea? If you are talking about appraisals, you are completely mistaken.
When preparing an appraisal, it is improper to choose and analyze sale comps without researching and considering buyer and seller motivations, time on the market, other sale factors, property condition, etc. If a house sold due to atypical buyer or seller motivation, and doesn’t represent an indication of market value, it should not be included as a comp, or if used, adjusted appropriately. And it is also improper to average the comparable sales. You reconcile the sales by applying more weight, or consideration, to the more pertinent and reliable sale indications. Any appraiser who averages the comps is not applying accepted appraisal methodology.