What's your house really worth?

<div class='quotetop'>QUOTE(JackDodge @ Mar 5 2007, 09:15 AM) [snapback]400264[/snapback]</div>

I'm a Realtor. Zillow is anywhere from the percentages you give and higher off the mark on some properties;oOn others, it's can be pretty accurate. Question is, how do you know which group your property fits into? In my area, 10 to 20% can equal anywhere from $30,000 to $200,000!

They do not have access to the information a Realtor has to do a comparative market analysis, nor is there any "experience" when pricing a property correctly; they base their figures primarily on the tax records of recently sold houses (that may not even compare to yours). If your neighborhood is comprised of very similar dwellings (as in the case of a large development, townhouse/condo complexes, etc.), then if there is enough recent turnover, their data will be fairly accurate.

FSBO's tend to nationally sell much less that Realtor-assisted sales. Other properties are sold within families for far less than the market would bear. There are foreclosures, etc.. All of these and more (like seller concessions at closing) can provide less than realistic prices, but on the tax records, all you get is the final number - which may not give you the "value" of the property.

Case in point: one of my listings was on the market for well above what my analysis said it should go for (my sellers understood this based on the data I gave them, but were looking to "move up", although they were planning on lowballing with their offers). They received 2 offers on their property (almost exactly where I told them their house would likely be sold at) which they turned down because, "They needed to get more out of the house". These offers were both ~$50,000 under the list price, but were within the low end of the range I had given them. Needless to say, the house did not sell. That was in a market that saw higher sold prices than we have currently, since the market has corrected itself and stabilized. I just "zillowed" my old listing, and surprise, it's "value" is within 1% of what the asking price was when it was my listing. Is that a coincidence? I think not. This "value", btw, is more like $60-65,000 over what this property would sell for today.

Bottom line is that it may give you the raw data, but without the details of the sales, the "value" remains unknown. And as in my example, if the house didn't actually sell, all bets are off.

 

Wow. According to this, my house is worth 1.28 times what I paid for it a year ago.

On the other hand, according to my realtor, houses in my area are worth just slightly more than I paid. (My house had been on the market for a while, and by the time I saw it it was priced to sell, so I got a slight bargain.)

I think that site over-values my home.

Of course, the real value is what someone will pay, and without actually putting it on the market, determining that is a very inexact art.

 

I didn't see Zen's post when I posted. But I think he confirms what I thought.

FWIW, my mother got her house for way below the market value because the seller was too cheap to employ a realtor or hire an appraiser. The seller didn't want to share the sale money with anyone. As a result she lost a bundle.

 

As for accuracy? It blows, and does so for various reasons. First, it takes months for updates (ie; a sale goes into the county recorder in a matter of hours). Other times, it's just plain inacurate. The priciest house within our 500 house community is appx 2.5 millon (recent sale), yet zillow shows it at 1.3mil. I'd say thats off a bit. Our house faces one that just sold for 1.6mil but zillow shows it just sold for 1.2mil.

Our neighbor just put theirs up on the market ~ range pricing between 1.7mil and 2.1mil but zillow shows it at 678K - WOW i'd run down their right now if i could get it for that! But hey, the mortgage companies DO need a place to advertise, I suppose. It is a fun toy though, but even the room size / sq. footage aspect can be inacurate ... probably about 15% of the time.

 

<div class='quotetop'>QUOTE(JackDodge @ Mar 5 2007, 08:07 AM) [snapback]400311[/snapback]</div>

The person that buys your house needs that info so that the lender will fund the loan. On the other hand in a refinance situation the loan agent needs the appraisal so that the loan request passes the underwriting process. BTW $300 for an appraisal is cheap. Zilliow is fine if all you want is a ball park estimate of the value of your home but as far as I know it is not used by any lenders that I know.

Wildkow

 

According to zillow, our property at 344 6th Avenue East ~ 59901 doesn't exist. Does that mean we bought the Brookland Bridge? :lol: Oh well, $400K down the drain.

 

<div class='quotetop'>QUOTE(hill @ Mar 5 2007, 11:30 AM) [snapback]400478[/snapback]</div>

I didn't want to give it my own address, just in case they were collecting adresses for junk postal mail, so I gave it a neighbor's address. It claimed that address did not exist, but it showed a map of my neighborhood with that neighbor's house, and mine, and the whole development. The map is accurate, showing the oddly-shaped streets. But as noted, i think the values are about 25% high.

 

<div class='quotetop'>QUOTE(daniel @ Mar 5 2007, 01:36 PM) [snapback]400545[/snapback]</div>

Well then that's not very nice for your neighbor!

It has my house valued way too high I think. I have an odd house for the neighborhood so it's hard to price. It's much older, a bit bigger, and has a smaller lot size than the neighbors. People around here want a yard and I don't really have one. Perfect for us though!

Yeah - I see one big problem - it thinks we have 1 more bedroom and 1 more bathroom than we actually have!

 

<div class='quotetop'>QUOTE(JackDodge @ Mar 5 2007, 01:18 PM) [snapback]400426[/snapback]</div>

True. It is another source of information, but it's unreliable, not updated (as has been noted), and can be wildly inaccurate. As far as it being a "weapon", you're bringing a knife to a gunfight. Realtors, mortgage companies, appraisers, etc., ROUTINELY ignore zillow for the previously stated reasons.

And no, you don't have to pay for an appraisal - most Realtors will give you a free CMA on your property if you're interested in listing. In my area, there's no fee, and many FSBO's do this to get an idea of how to price their house, to get "something for nothing". However, sometimes, after they realize what's involved (and I believe NJ ranks highest in the US for the complexity of real estate transactions) in actually marketing a property effectively, arranging appointments to show, having people knock on their door at anytime with no advance notice, etc., not to mention post-offer negotiating, keeping the contract together (we use lawyers here and many times it degrades into a testosterone contest - not that some of the Realtors are any better, mind you), they will call back and ask us to help them sell their house. Most FSBO's want to save on the commission, which is 5-6% in my area. FSBO's in my area typically sell for ~10-13% less than Realtor-represented properties. A great many of them are not "saving" anything, but are actually losing money.

That listing of mine I referred to in a previous post that was $60-65,000 above what it should go for right now doesn't even indicate number of bathrooms or bedrooms - how exactly can that be compared to anything?

 

<div class='quotetop'>QUOTE(Dragonfly @ Mar 5 2007, 02:52 PM) [snapback]400582[/snapback]</div>

:wub: Yes, I was embarrassed as soon as I had done it. But since it said the address does not exist, nobody was hurt in the end. But it was a bad thing I did, I admit it, and I sentence myself to eat a head of broccoli with supper as a punishment. (I thought of sentencing myself to say one hail mary, but that seemed too severe for the crime, and besides, I don't know how it goes. And since I like broccoli, that seemed a better punishment.)

 

LOL!

 

The whole "what is your house really worth" process is deeply flawed. The process assumes all comparable homes are on the market at the same time. If all comparable homes were on the market at the same time, all the homes would be offered at a lower price.

Secondly, the realty process only considers the footprint of the structure and not what it costs to operate the structure. James Dulley, http://www.dulley.com/, writes a weekly column that allows any structure owner to calculate their Energy Efficiency Index (EEI) based on measured data. Any structure (home, business, church, office, school building) is comparable based on square area of the footprint, heat- and cooling-degree days for the site, actual energy use (wood, solar, electricity, natural gas, fuel oil, etc.). An EEI greater than 20 is a serious energy waster. An EEI between 10 and 20 indicates many things can be done to increase efficiency. An EEI less than 10 indicates a structure has a few things that can be improved.

Using these principles we retrofitted our 2300 sq ft home in 1995 to reach an EEI of 1.0 or less. As energy prices continue to increase and energy efficiency become more important, the EEI offers an objective way to compare the energy operating cost of a home. This method is superior to relying solely upon "paid liers" (appraisers) and gives realtors an objective method to present the advantages and disadvantages of a home or business.

 

<div class='quotetop'>QUOTE(hill @ Mar 5 2007, 10:38 AM) [snapback]400386[/snapback]</div>

The SQFT/Bdrm/Bath info for our entire neighborhood is off. WAY off. Like others have said, Zillow's great for SWAG/ballpark but you need more information than the last sold price to make a valid comparison.

 

<div class='quotetop'>QUOTE(skruse @ Mar 5 2007, 08:20 PM) [snapback]400626[/snapback]</div>

What your house is really worth is determined, ultimately, by the buyer. Real estate follows the laws of supply and demand. It was a sellers market in this area (indeed, most of the nation with a few exceptions) from ~2000 through 2005, with 2005 representing the peak of a sharp rise in housing values. We had bidding wars on townhouses in certain "hot" developments - this doesn't support your assertion that comparable homes being on the market at the same time means they would be offered at a lower price. During a buyers market, these properties would need to compete with each other, which would result in a overall lowering of the prices - but it is almost impossible to undersell a property in this area - we are solidly in a buyers market, but we still see bidding wars if a property is priced aggressively.

The CMA process we do takes much more into consideration than mere footprint - as a matter of fact, NJ is one of the only states that does not typically list square footage (except for new construction) - most other states use a $/sq. ft model as a component (but by far not the ONLY component) of the pricing process.

I truly wish energy consumption (sorry, I deleted that part of your post to reply mainly to the first part of it)was more of a factor in people's decision-making around here, but we've just gone through a "McMansion" period with builders, proof that the operating costs of a house do not rate higher than status symbology - buyers rarely actually ask for operating expenses in my experience. Sad, but true.

 

<div class='quotetop'>QUOTE(JackDodge @ Mar 5 2007, 10:48 PM) [snapback]400673[/snapback]</div>

This is another part of the problem - there's no verification of what's inputted because no one is accountable...you could enter whatever you wanted to screw things up.

And while I've heard and seen enough of Anna Nicole Smith in the last few weeks to last a lifetime, the Maher quote in your sig line cracked me up! :lol: