Realtor CMA or Zillow Zestimate®?
Why is my Realtor using her own comps to price my home and not the higher estimate I was quoted from Zillow? Which is better to use?
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 thought were oftentimes inflated, overpriced home value estimates from websites that appeared to use computer generated formulas to make their home value determinations. 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 using extreme range pricing in determining a home potential valuation. Unfortunately, that type of vague and generic method can prove to be just as costly to some sellers that rely solely upon it as well. Why? When a seller prices their home too high, it can result in little to no buyer showings that ultimately force the seller to drop their asking price (sometimes multiple times) in a late attempt to grab new home buyers and recapture the old ones already lost – in most cases 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 because they left money at the closing table that could have been counted towards their net proceeds and profits.
When obtaining a more accurate idea of a home’s potential value, here’s a little big something to keep in mind:
INSIDE HOME TOURS – A Realtor, unlike a website giving generic estimates, has most likely toured the actual home in question and, in many cases, some of the other homes that have recently went pending or sold in the area as well. With that invaluable knowledge of size, feature and condition, it is my strong opinion that a Realtor can best determine a competitive listing or offer price for their client.
LOCATION: A Realtor, unlike a generic website, 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. 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 (i.e. high/low ranking school boundary lines, alley or noisy establishment abutment, main thoroughfare noise compared to a quieter residential street, unpermitted rooms that would most likely be called out by city inspectors for repairs if the home’s location lies in a city that requires mandatory city inspection, etc). Again a local informed Realtor is most likely to factor most, if not all, of the above situations when pricing the home to compete. The aforementioned scenarios are usually NEVER taken into consideration by the generic websites’ home valuation processes because they admittedly strongly rely upon public tax and financial records which generally omit this type of hands-on information.
MARKET CONDITIONS: Most importantly, a local Realtor will most likely be aware of the market conditions in the area of the home than a website based in another state. As a BUYER if you lowball in a multiple offer seller’s market your offer will not be taken seriously. If the 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 with a good faith deposit on the line. 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 may be stuck with the home a lot longer than you planned. An informed Realtor will have studied the market conditions, therefore knowing the pricing trend to best position your offer or the listing price of your home.
CMA’s ARE NOT JUST A PRETTY FACE: As you have read, it is no simple task determining a home’s value. Even most generic real estate sites now concede and advise buyers and sellers in their disclaimer remarks to use their home value 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, it is my opinion that when trusting your most important investment, it’s best to leave it up to the humans.
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To get a detailed CMA (Comparative Market Analysis) for your Los Angeles, Long Beach, Lakewood, Carson, Downey home, call me at 310-508-4354 or simply fill out this short and easy CMA Home Valuation request form.