Tag: Zillow

Is Your Home Really Worth What the Internet Says?

Posted on by Sofia Gallamore

I’ll admit it – I’ve typed my own address into Zillow too, just to see what popped up. I mean, hasn’t everyone?

Zillow’s Zestimate tool (and other online automated home valuation tools) are easy and accessible. One click, and your home is suddenly worth $500,000. Or $525,000. Or maybe it dropped $20,000 overnight for no clear reason.

I see these online automatic pricing estimations come up all the time in conversations. The problem is when buyers or sellers put too much weight on these numbers – it can set expectations that don’t line up with reality. It is a good reminder that Zillow, your Listing Agent, or your dad’s friend who was a realtor 15 years ago do not determine home values. Buyers determine home value when they purchase a home. A seller can propose a price to the marketplace that they feel is accurate (the list price) – but buyers really have the final say. Too many times have I heard a list price defended by an automated pricing tool. The intent of these tools was to provide a general idea of what a home is worth, but they do not take into account many important pricing elements.

So, let’s talk about it.

What Is An Automated Home Valuation Tool?

These online programs use a computer algorithm that pulls public data (like recent sales, tax records, and square footage) to estimate your home’s market value.

But here’s the thing:
– It’s never seen the inside of your house
– It doesn’t know what you’ve renovated
– It doesn’t understand that your lot backs to a greenspace, while your neighbor’s backs to a busy road
– It has no clue what buyers are feeling in your local market this week
– It has no idea how many windows your home has that let in all that gorgeous natural light
– It doesn’t consider that your neighbor’s home reeks of cigarette smoke while perhaps yours does not

Zestimates and similar online tools are a general ballpark, but not an accurate, trusted guide for pricing your largest asset.

Why It’s Often Wrong (Sometimes by a lot…)

Automated Home Valuation Tools can be off by tens of thousands of dollars. In some cases, even more. That’s because they miss the details that truly impact value, such as:

  • Condition and style of the home

  • Layout and flow

  • Street, school, or neighborhood differences

  • Renovations and upgrades

  • The current demand from buyers in your area

What to Do Instead

If you’re just mildly curious with no plans to make a move anytime soon, then these approximate values may be all you need and often times do the job. But, if you’re wanting to gain a deeper understanding:

  1. Play Market Detective in Your Area – If you like to be a bit more involved in educating yourself on your local marketplace, I recommend monitoring recently sold inventory and identifying patterns. For instance, do all the homes on one side of the street (that back up to a busy road) end up sitting on the market twice as long as the neighbors across the street? Does it appear that all the single-level homes in your subdivision sell for much higher than those in which all the bedrooms are upstairs? These nuances can equip homeowners with insight that start to scratch the surface of home sales and trends – and help align your home’s value with educated, data-supported trends.
  2. Get a Local, Professional Perspective – If you prefer to have an additional resource or if you’re even considering selling you should get a second opinion. A thoughtful, hyper-local one.When my team and I are thoughtfully pricing a home, we utilize a Comparative Market Analysis (CMA).  We don’t just look at price per square foot. We look at:
  • Condition
  • Local buyer demand
  • Agent conversations and feedback
  • Recent sales trends
  • Charm and character
  • This data is paired this data with experience on the ground — from showings, inspections, and negotiations — so you’re getting a price backed by both analytics and nuance.

Even if you’re just curious and not planning a move, I’m always happy to pull a quick snapshot for you. Sometimes it’s just fun to know!

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In summary, it’s important to know that automated online home valuation tools aren’t bad, and actually serve as a great starting point. However, it is important to remember that they are a launching point for pricing – not the end all be all!

Thanks for reading and for always supporting my business; I truly love being your go-to real estate resource, and I’m always here to help when you need advice, perspective, or just someone to bounce ideas off of.

Your friend and realtor,


Sofi

Make a Low-Ball Offer

Posted on by Julia Robertson

“What price should we offer?” Is the burning question.

When the time comes to prepare an offer package, among the other important details such as pre-approval letter, terms, possession, closing, and personal property included in the sale; there is price. Price is determined by the condition, location, and demand of homes like the one your interested in. With all these things considered, your REALTOR® helps you choose an offer price. Often your REALTOR® will prepare a comparative market analysis(CMA) and review with you. Your REALTOR® will also contact the listing agent to “get the scoop”, see how competitive other offers are, and when your offer is due by.

Now you have all the details in order for your offer. You want to offer below the asking price, but you really want this house! If this is your dream house, do not write a low ball offer if there are other competitive offers in a high demand area. I will say this again, do not write a low ball offer if you find out there are other competitive offers and the house is in a high demand area. If you really want the house and you are up against 1-20+ other offers, put your best foot forward and go all in. That doesn’t mean offer an outrageous amount over the listing price. Your experienced REALTOR® will provide all the tools to write a competitive offer and get you the house you want. Or you will learn rejected offer by rejected offer, that it takes just a little something else to win in a competitive offer situation. Ok… but this is supposed to be about writing a low-ball offer, right? Yes. It is also important to know when NOT to write a low ball offer.

“How do I find a house that I can get a deal on and write a low-ball offer?”

So glad you asked. Now I can tell you about a recent success story of offering $25,000 less than the listed price, and buyer got the house they wanted. The home was originally listed for $625k. After 30 days it was reduced to $594k, then about 20 days after that reduced to $575k. The series of price reductions are a story of a motivated seller and its possible the house was overpriced to begin with. After communicating with the listing agent that my client wanted to offer $550k(when it was listed at $594k), the seller wanted to see if they would get more traction at $575k. When the house did not get an offer that weekend, we submitted the $550k offer, waiving any repairs or price reductions. Buyer would still do their inspections and due diligence. That is exactly what happened. The offer was accepted, inspections completed, additional inspections were completed by structural engineers, roofers, and siding experts. Any repairs found seemed doable over time and we moved forward to close. Done deal. Some times you have to give up something to get something. In this case, buyer was willing to take on minor repairs as long as he completed a thorough inspection of the house.

Here are a few things to consider when looking for a house to get a deal on:

  • Days on the market. After 30 days, a seller may have to pay a mortgage. Every month the house is on the market, there are expenses. Especially if it is vacant.
  • Is it in pre-foreclosure? You can find “potential listings” on Zillow. These are homes in pre-foreclosure. They may have missed a few payments and need to sell. Ask your REALTOR® to research the property.
  • Several price reductions. Sign of a motivated seller.
  • The “bones” are good, but it may need some work. If the work looks doable over time, research the costs to repair.
  • Ask your REALTOR® to “get the scoop”. Your REALTOR® will ask all the right questions.
  • Off market properties. Ask your REALTOR® to ask around. Sometimes a seller may be thinking about selling, and told their agent to keep them as a “pocket listing”.
  • Time of year. Consider house shopping after the spring/early summer boom is over.

Here are a few things to consider when writing a lower than asking price offer:

  • Ask your REALTOR® to prepare a CMA. Understand the neighborhood pricing.
  • Consider waiving repairs and or additional price reductions. This is huge advantage to seller, but also a huge advantage for you to buy at a lower price. Win-win. Protect yourself by competing your inspections.
  • Only waive an inspection if you have done a pre-inspect. Your REALTOR® may have you sign an acknowledgement that inspections were recommended and you declined.

If you’re looking to buy or sell a house- contact me! I’d love to guide you through the process.

Julia Robertson, Broker | Living Room Realty

Licensed in Oregon & Washington

541-505-1111 | julia@rebyjulia.com

 

Photo Credit…Michael Waraksa, New York Times

 

 

Read it and weep: 1 in 3 Zillow respondents cried while trying to sell their home!

Posted on by Chad Meier

Cry Baby Cry indeed!

If seeing your home full of moving boxes has made you tear up, you may not be alone. In a new study of Zillow users, it’s revealed that 36% of their respondents say that they have cried at some point while selling their home (a nerve-wracking experience that can rival a divorce or dramatic break-up in terms of stress) and among those who admitted to shedding a tear, a whopping 20% say they cried five or more times during the process!

“If you’ve ever sold a home before, you know how daunting the process can be,” said Zillow Brand President Jeremy Wacksman in a statement intended to address this survey information. He went on by saying “Anticipating that stress can be a huge obstacle that keeps homeowners from moving on to the next stage of their lives.” Further research reveals that over 75% of Americans who have sold a home in the last three years found the experience stressful. Among the reasons Zillow respondents cited for their anxiety, 70% said uncertainty over the sales price, while 69% worried their home wouldn’t sell within their desired timeframe. Meanwhile, 65% worried their offer would fall through and 65% had anxiety about repairs and renovations prior to a sale. According to a separate study, 71% of those surveyed did not properly time how long it would take to sell their home. For 33%, the process took longer than expected.

However, not all real estate pundits and professionals have found these numbers to be true for their own client bases. When asked, most of the Portland based real estate brokers that were polled for this post, report that their clients find the process of selling a home – or buying one for that matter – much easier than what Zillow’s user data suggests. Could this disconnect stem from how much a licensed (and qualified) REALTOR® brings to the table when it comes to managing the process for their clients? The data would suggest so.

Zillow then goes on to report that their data suggests homes listed between May 1 and May 15 tend to sell faster, and that Nationwide, homes listed during the first half of May sold six days sooner and for $1,600 more than an average listing. But in order to avoid real estate-related stress no matter when you sell, Zillow recommends starting the process by getting professional photos of the home for the vast majority of buyers who will start their search online. On this point, we can all agree!

It’s also a good idea to know the range of prices and be prepared to negotiate and make concessions, they say. “Our survey found more Americans were stressed over selling their home than planning a wedding, getting fired or becoming a parent,” says Wacksman. Zillow’s research also show that 61 percent of their respondents are buying a new home at the same time as selling their current residence. This of course adds significant pressure and financial complexity to the process. Want a few more nuggets of wisdom from Zillow? “Pay attention to online curb appeal and be ready to make concessions.”

They then follow up their assertions (and reveal their true motivation for supplying their data) by pitching their newest service: “Homeowners looking for convenience, certainty and control now have an alternative to the traditional sale process. With Zillow Offers®, home sellers can request a free, no-obligation cash offer from Zillow to buy their home, and they can pick a close date that works best for them – without having to worry about open houses or fixing up the home for sale.”

It’s at this point, I wonder how many are being motivated (scared) into giving Zillow a call?  Well, if you’ve read any of my latest ramblings, you know where I stand on THAT subject. ¯\_(ツ)_/¯

Have questions or want to discuss how selling and/or buying real estate can actually be fun & rewarding at the same time? Please feel free to reach out to me anytime at 503-709-9600 -or- Chad@PortlandHomeBase.com