This article originally appeared at LinkedIn here.
How accurate is Zillow when it comes to determining the market value of a house?
While the internet is a great tool for accomplishing a great many things, for others getting the opinion of a professional is really the only way to go!
As an example: When we're not feeling well how many of us go to WebMD to try and figure out what's wrong only to find that our symptoms relate to many illnesses, some of which are really not very good?
Of course at that point the only way to actually find out what is wrong is to visit our medical professional who actually knows what to look for.
In many ways our property is no different with no one size fits all answers concerning the value of a residential home!
Is Zillow.com really the arbiter of a homes value?
Depending on the reason that someone is looking to find a homes market value, the price they find at Zillow.com may come as welcome information or potentially as a punch in the stomach!
'On the surface, the method used by Zillow seems like it would give a pretty decent ballpark figure for the value of a home. And sometimes, it succeeds. More often though, Zillow estimates are off significantly – sometimes by 40% or more.' ()
If you are a homeowner and the value of the house is listed on Zillow for more than you thought it was worth there will be dollar signs dancing in your eyes while, at the same time, a potential buyer interested in the same property may be devastated that their potential dream home is out of their price range.
For a real estate broker who has to deal with the unreasonable pricing expectations of a potential seller, it is their job to try and instill a sense of reality when it comes to establishing a listing price. An incorrect estimate of value at Zillow.com makes the job tougher and in fact may cost them the listing to a broker who is willing to tell them what they want to hear.
The fact of the matter is that the listing price for a home should be set by the current selling conditions in a given area adjusted for the bells and whistles (or lack thereof) in the specific house.
In other words the market sets the price and not Zillow, with the final contract price for a home sometimes close to the online estimate and sometimes far away!
It is critical that all who use Zillow.com understand that the number posted there is merely a guide and, as always when you are using a guide, caveat emptor!
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Written by Michael Haltman who is the President of Hallmark Abstract Service. HAS is a provider of title insurance in New York for residential and commercial real estate transactions.
Remember that you have the right to choose your own title company!
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