Inaccurate Zillow 'Zestimates' are known as a source of conflict between buyers, sellers, and their agents. The buyer complains that the list price is too high if the Zestimate is lower and the seller is not happy either if his agent suggests a list price lower than the Zillow estimate.
According to Zillow CEO Spencer Rascoff, "Zestimates are a good starting point" but have a "median error rate" of about 8%. There is a reason why Rascoff is rather cautiously defining what a zestimate should be, nothing more than one factor in pricing a home.
As a real estate consultant, I am committed to come up with the most accurate estimate not only if clients want to list their home with me but also if the neighbor asks for a free price estimate.
It indeed is a team effort between the homeowner and the agent to come up with a home value that is right on the market and competitive.
While the basis for Zestimates are simply past sales in the extended neighborhood, my price estimates include a comparative market analysis known as a CMA, and more important, the factors x, y, z or as I call them, "the Unzillowables."
How does the school district look like? Does the home have a pool? Is the home very well cared after or is it in a fixer upper condition? Is the neighborhood child friendly? Even the timeline of the owner when he or she wants to be out of the house is a factor. Military families have less time than civilians to sell their homes once they get their PCS, the military relocation order. They tend to list slightly below market value to attract as many offers as possible in short time to be able to close escrow within short time.
No matter what the individual challenge is for the seller, it is always the agent's personal walk-through and the owners honest feedback that will be key factor to work together until both parties agree on a number to be the most accurate estimate and future list price. The appraisal plays a crucial role as well in this process.
No computer result can replace a great homeowner-listing agent relation based on trust, expertise, and honesty.
More about this topic from Kenneth R. Hearney.
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