Getting a proper Market Analysis is key to listing your home for the correct asking price. Many people look at websites such as Zillow or Trulia in hopes of getting an idea of their home’s value before deciding to reach out to a local REALTOR®. Unfortunately, this common first step can result in an unrealistic view of the market. REALTORS hear all too often that a client changed or delayed their buying or selling decisions because they believed homes to be priced too high or too low for their needs. A lot of the data found online is incorrect or outdated and simply cannot project an accurate valuation. In this article we help shed some light on how these national websites arrive at the values they’re displaying.
If you look in the FAQ section of Zillow.com, you’ll find their explanation of a zestimate: “The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research”
In order to determine the accuracy of an online valuation (such as a Zestimate), we need to analyze where these websites get the data used to perform estimations of market value. Because sold values of homes are not public information or supplied to national real estate websites they must rely on public data primarily in the form of county records or public listings. Here is a breakdown of what that information contains: 1. Property square footage, taxes, and lot size all come from county tax records. o These tax records are not always up to date and the assessed values are reached by analyzing many homes in a wide geographic area to assess tax rates, not to determine market value of a home. The valuation is also performed once every several years, whereas market value is constantly changing. 2. Public listing information is the active listings that are submitted to national websites (a process called syndication) o The problem with using asking prices to determine market value is that many homes have to undergo multiple price reductions before they sell. National websites like Zillow, also don’t take into account the homes that don’t sell (often due to being overpriced).
SOLD information is the most accurate way to correctly price a home in the Springfield, MO and Southwest Missouri market and that information is only available through REALTORS® who are members of the Southwest Missouri Multiple Listing Service.
This HBA Home Pro Tip provided by Debi Murray – Murney Associates, Realtors – The Office of Patrick Murney
If you are considering selling or purchasing a home, a Murney agent will be more than happy to give you an accurate representation of the market. Even if you are simply curious, feel free to email or call a Murney agent for a free Market Analysis, there’s no obligation and we’re always happy to help and educate.
