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Everybody loves Zillow. I love Zillow. I love how excited it gets buyers and sellers when they see a home they love or what a neighbor’s house is selling for; a useful tool in many ways, for better or worse, it empowers the consumer. I look at Zillow to see what my clients/potential clients are taking as accurate information… and then I do my homework. The #Denver #realestate market is moving so quickly that even agents and appraisers can have a hard time keeping up. Public record algorithms don’t have the ability to distinguish the differences in the quality of one property from the other, upgrades, location, or if there’s a crack house next door. Algorithms don’t call other agents to inquire about that “Coming Soon” sign or have the latest data on solds as it takes some time to record.
The Los Angeles Times recently published an article that lays it out quite clearly. Though a “Zestimate” can have a low margin of error, it can also be alarmingly high. Imagine a scenario where you’re meeting with your perspective agent thinking that your home is worth 26% more than what it will really sell for.
Sellers, armed with the Internet, often have an idea in their heads about their home’s value. When I pull comparable properties, show them what the list vs sold prices are and how many days on market it’s taken those homes to sell, they may find a different story. Sometimes the news is good, based upon my data, their home may be worth more than they think. Other times it can be a let down.
Buyers burn the midnight oil searching Zillow then send me a link to their dream home. When I hit the MLS at 7 a.m. most often I find that this dream home is under contract… or sold three months ago. If you’re looking to buy a home, I’ll send you to REColorado, the consumer website linked to the Denver Matrix MLS I use so we can work together efficiently. It’s updated throughout the day, has great home search capabilities and saves me time looking for your real home, not the one someone’s already moving in to.
All this to point out that you now have access to a lot of information about my business. A lot of it is helpful and a whole lot of fun, but none is as accurate as hiring a professional; one who specializes in finding the right home in the right neighborhood that suits your needs. If you’d like an “Exact-i-mate” about what your home might sell for in today’s Denver market, give me a call I’d be glad to sit down with you and show you your market value and why.

As an actor, the most common question is “How do you memorize all those lines?” As a Realtor© it goes something like this… “How come your comps say my house is worth X when Zillow says Y? “
I’ll tell you why. Real estate websites have transformed the consumer experience when buying or selling, bringing to the public the listing and sales info that used to be private and difficult to get to. Some of this consumer info sharing has been good for all. A buyer, for example, can reduce our power-shopping trips by searching for homes that suit their needs, send a list of what they want to see and off we go. Well… after I double check the listing information, as much of it is out of date; homes sold but still listed as active, short sales if my client has a move in time frame, homes that have been on the market for a year… these get scratched from the shopping list. But for sellers it can be a different story.
These sites appeal to the savvy seller, empowered by access to the information provided, They try hard to do a lot of the work for you, grabbing recent sales, public record and homes listed in your neighborhood, then running them through a computer program and, in some cases, going so far as to create an estimated value on your property. Here’s where it gets tricky. Computer programs have no discernment.
I recently got on Zillow to double check one of my listings to make sure the information was correct. What I found was a massive error stating that according to public record the home had sold in 1997 for $150,000, a “fact” I cannot find anywhere. With a price point over $600,000, this is a costly mistake and one my sellers were understandably unhappy about. I’ve contacted them numerous times to correct, but so far nothing. I checked back yesterday and the website’s value of the property had gone up $17k in one week for no apparent reason. In my own neighborhood, Zillow has deemed my home worth nearly 40k less than what I can sell it for, largely due to a few foreclosures nearby, and this is happening all over the city.

A computer takes the description of your home from the public records, or from a recent listing, determines the number of bedrooms, bathrooms and square footage, and pulls out the closest homes to yours that have sold recently that have similar data on record. The computer can’t necessarily distinguish nuances in a property’s condition or aesthetics, nor does it always correct for whether the house two blocks over was a short sale or a foreclosure. Depending on where you live, how similar homes are to each other in your area, the level of sales activity near your home and the level of accuracy found in the public records for your house and nearby homes, these sites can offer very comparable “comps” — or comparables that aren’t really comparable at all. If you live in a fairly cookie-cutter subdivision where several homes just like yours have sold very recently, you’re likely to get a good set of comparables, and a value estimate that’s at least in the ballpark. But in many areas, lots of fairly common scenarios can come between you and a good comp/bad comp:

Your home is older and has had a lot of improvements and even additions that are not in the county records.
Homes in your area are very different from each other.
You live in a neighborhood very nearby another neighborhood where homes have a much higher or lower value than your area , say, because they belong in a better school district or even on the other side of the city limits.
Your home is in an area where homes are dense, the algorithm might jump over many very nearby properties to get to a relatively dissimilar one even a half-mile away, and that can give you bad comps.

The listings provided by the sites can be very useful for homeowners trying to stay on top of what homes around theirs are selling for — not listed for, but actually selling for. They are less useful, in my opinion, at placing values on properties; the sites that do this usually have their accuracy rates listed somewhere on the site, and I haven’t yet seen one that’s impressive.
But when it’s time to actually list your home, or figure out what it is worth, no computer — no algorithm — is as accurate as a living, breathing local real estate professional who sees and sells all the different specimens of homes in your neighborhood and sees firsthand what ready, willing, qualified buyers actually pay for them, day in and day out.
I think it’s important for sellers interviewing listing agents to discuss the online comparables with prospective listing agents, but not as a counterargument to what the listing agents recommends you list your home for. Rather, it’s a smart way to see some of what the agents know, and what you can learn about the other properties in your area. If you’d like a detailed estimate of home values in your neighborhood or a comparative market analysis of your home, give me a ring, I’d be glad to help.