Zestimates are not enough
I used to teach social studies to middle school kids (you're welcome to anyone who's ever raised a teenager). Whenever I assigned a research project, we’d talk about how Wikipedia may be helpful and fun when you're getting started, but it’s not a reliable resource. It can tell you the names of ancient Chinese dynasties, for example, but there are much better places to get reputable facts about artistic styles of the Han era. Our team at Liz & Ellie Local feels the same way about Zillow and their Zestimates: the tool is fast, fun, and dare I say it—exciting!— to use. However, buyers and sellers should never rely solely on a Zestimate when embarking upon a real estate transaction. Our whole focus is on our clients getting the most for their investment, and we use much more than an algorithm to achieve this goal. Read on to discover the data, and nuance Ellie and Liz utilize to find a home’s true selling point, beyond the Zestimate.
What is a Zestimate anyway?
A Zestimate can roughly be described as Zillow’s version of a Comparative Market Analysis (known hereafter as a CMA), which synthesizes lots of information to assign a market value to a home. You type in your home’s address, and less than a second later, you get a number estimating how much money you could get for your home. Zestimates are calculated from an algorithm, which is only as good as the data behind it. What data is used? From Zillow:
Home characteristics including square footage, location or the number of bathrooms
On-market data such as listing price, description, comparable homes in the area and days on the market
Off-market data — tax assessments, prior sales and other publicly available records
Market trends, including seasonal changes in demand
So, what is a CMA, and how is it different from a Zestimate?
A CMA is “an unbiased estimate or opinion of the market value of real property by a real estate licensee who is not a licensed or certified appraiser” (mass.gov). In plain language, a CMA is created by a real estate advisor who has training and expertise in finding the value of a home. We look at the same data that Zillow does, but because we are humans who live in the real world, we also go to the home and look at it in person! We learn its history. We will see if the home has been neglected, properly maintained, or improved, which can strongly influence a home’s selling price. Other factors that we take into consideration include:
Micro-differences depending on ZIP code, neighborhood, or even street
Recent upgrades to kitchens and bathrooms (or heck, any room!)
The structural integrity of the home (foundation cracks and termites don’t end up in a Zestimate)
The “guts” of the home: the age of the HV/AC systems or the roof, for example
How awesome the parking situation may be (a driveway in Cambridge? Yahoo!)
Activity in the home’s market area seasonally, monthly, and even weekly as needed
In a nutshell, CMAs include the details that complete the picture of home pricing: condition of the home, presence or lack of updates, neighborhood nuance, relevant sold prices of comparable homes in a specific area, and most importantly, the expertise of a local agent.
If you’re selling:
A Zestimate could be higher (or lower) than a true home’s value. You may get your Zestimate and become elated or despondent; but only your real estate agent can do the research and put the number in context for you. Liz and Ellie take the time to get to know you and your home when they’re representing you as a seller’s agent, so they’ll understand how to explain a home’s actual value in a way that makes sense. Sellers can run into the pitfall of wanting to list at a higher price than the market will bring in. On the other hand, we can see all the potential your home has to offer, and we can advise you on how to stage your home to sell for more than you could imagine!
If you’re buying:
Ellie and Liz will put together a CMA for a buyer who wants to put in an offer on a property. When we’re representing you as a buyer’s agent, we want you to know what this home is truly worth; getting an accurate CMA helps us build the best offer possible for you. Alternatively, our CMA may tell us that the home isn’t worth the listing price; we can strategize and help you move forward with a fair offer. None of this can be done with a Zestimate; it simply does not provide the information needed to make one of the most important investments of your life.
You need so much more than Web-accessible data when pricing a home. If you love Zestimates, have fun typing in your address and those of your friends and neighbors. Delight in the quick calculation of the number. Then call us and get the trustworthy research done, so you can buy or sell your home with the unwavering support of real live human experts.
Ready to work with us? Get in touch. We’re here to help.