Sometimes our clients present us with “THE VALUE” of property per one of these free online home valuation websites sites and in some cases, they challenge us to disprove it (Zillow says it, or some other site, so it must be right, goes the thinking). If they want to buy a house which is listed for more than the auto-comped value, it may cause some emotional anguish. And if they want to buy one which is listed for less, they may feel a little giddy – unless multiple offers are looming.
The same is true with home sellers. They agonize when Zillow, Trulia or some other big name site places a worth on their property which is less than what they feel it should be.
Often the best way to respond is to show many of the online valuations and not just the one the client is focused on (often that’s either Zillow or Redfin, but some are attached so some other site’s numbers.
What might surprise a lot of people is the huge discrepancy in values given.
Sample auto comp values online
A good exercise is picking a home that you know fairly well and then seeing what the online home valuation tools say for each one. I picked a home that I know and ran the address through several websites that provide automatic pricing info. Here are the results, from low to high:
Not included in online home valuation study: Eppraisal $2,072,000 (too high)
Included in the online home valuation study: Chase $1,721,800 Collateral Analytics (via Realtor.com) $1,671,000 Redfin $1,644,906 CoreLogic (via Realtor.com) $1,631,300 NAR RPR $1,617,440 (subscription only for Realtors) Zillow $1,580,300 Quantarium (via Realtor.com) $1,566,759 Bank of America $1,504,391
(Please note: the Trulia home value estimator is the same as Zillow’s Zestimate because Zillow owns Trulia.)
From top to bottom, the amount varies by $217,409! That’s a 14% gap between top and bottom. Had we included Eppraisal, it would have been even crazier.
How can the online home valuations disagree so much?
Recently an old friend asked me why some Realtors are on Zillow but not all Realtors are found there. She was wondering if perhaps they weren’t really Realtors if they weren’t on that site. This is a very smart lady, and I thought if she was confused about it, anyone could be. So today I wanted to go over that question.
When you see a real estate agent’s name and image on Zillow, it’s either because that person is the listing agent of the property being viewed, meaning that he or she represents the seller of that home, or is someone advertising on Zillow in that zip code. The same applies with Trulia and nearly all online real estate portals or websites.
Why do some Realtors or real estate licensees choose to spend their advertising dollars on Zillow, Trulia Yelp, Angie’s List, FindTheHome, Movoto, Redfin, etc., and others do not?
Simple: it is how they decide to run their business, and how they expect to see a return on investment.
Often consumers believe that Realtors just help peopole to buy and sell homes. It is true that we do that, but we are also business owners. We spend time “on” the business, planning its growth, creating what should be future business, paying our work related bills. We need to budget carefully and allocate our marketing and advertising dollars wisely or we end up with little to show for our hard work. Real estate is an expensive business – agents (usually) split income with a broker, pay business fees (thousands of dollars per year) to that company, pay dues for the MLS and Realtor associations, and many other things. It is not uncommon for real estate agents to spend 20-40% of their net (after splitting with their broker) on marketing costs (fliers for listings, postcards, the for sale signs, photography, print ads, online ads and so on).
For some people, having an ad on the San Jose Mercury’s website, or Facebook, or any online site seems like a good idea and will help clients to remember that Realtor. For others, their main marketing is print advertising, open house work (more time than money), or door knocking, or cold calling, email marketing, video email marketing, blogging, social media marketing, contacting for sale by owners or expired listing home owners, or simply keeping in touch with their sphere of influence and requesting referrals from them. For most, a solid business plan includes several sources of new clients at all times, so most agents do some sort of combination of these or other avenues to grow their business.
Zillow is a very popular real estate site for home buyers and sellers all across the U.S. Many real estate agents have decided that advertising there will bring them business. Others would rather spend marketing dollars elsewhere. It is neither to their credit nor to their discredit if they advertise on that site or any other. It’s simply a business owner aiming for a good return on dollars spent. There are good agents found on those sites and there are good agents who will not spend their money on those sites. Don’t be fooled into thinking that being on them makes a Realtor better, or that being off them makes a Realtor worse. They are just agents who spend their money differently to grow their business.
The real estate news is so mixed it’s mind boggling, whether it’s a national perspective, one specific to California, the San Francisco Bay Area, the “south Bay”, Silicon Valley or even San Jose in particular. It is anything but a uniform, monolithic market. Even so, it’s good to look at the big picture along side the hyper local level, and that’s what we’ll do today.
Today’s San Jose Mercury News featured a front page article by Sue McAllister (an excellent reporter) on Santa Clara County housing values. She shares that Zillow says that we’ve hit bottom here in Santa Clara County. That is certainly good news to home owners accross Silicon Valley! And I don’t disagree that countywide, we’re definitely looking up right now. No guarantees for the future, but Zillow says that the threat of a second or double dip no longer seems likely. Whew!
Unfortunately, there’s another real risk to this recovery and it’s not the “shadow industry”. This time it’s homeowners walking away because they’re underwater (not because they can’t afford to stay, but because they choose not to). Sixty Minutes did a segment on this phenomena of home owners walking away last night., which you can watch via this link. (more…)
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
Mary Pope-Handy, Realtor ABR, AHWD, CIPS, CRS, SRES Christie's International Real Estate Sereno DRE License #01153805 408-204-7673 firstname.lastname@example.org “Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Clair Handy, Realtor, GREEN Christie's International Real Estate Sereno DRE License #02153633 408-721-6160 email@example.com “Helping nice folks to buy and sell homes in Silicon Valley”
This is the Valley of Heart's Delight blog , covering Silicon Valley real estate - Santa Clara County, San Jose, Los Gatos, Cupertino, and nearby communities in the South Bay Area and lower Peninsula. Find info on neighborhoods, disclosure issues, buyer and seller tips, and housing market conditions in the west valley and most of the county.Please also see my other websites and real estate market statistics site, which are listed in the sidebar, above.
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES Sereno DRE License #01153805 408-204-7673 firstname.lastname@example.org
“Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.