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4 Main Sources for Finding out How much your home is worth.
By robertearl | March 6, 2008
Lets take a look at the choices and models available to you.
HouseValues.com: HouseValues.com counts on site visitors to answer about two dozen questions, which are then forwarded to a local Realtor who pays for the lead. Real Estate Agents prepay for service areas. When leads are received by HouseValues.com, they are sent to the agent for the area. These leads are assigned to Agents that prepay a monthly amount to secure an area or selected zip codes. According to reports regarding HouseValues.com “A weaker residential housing market has hurt. The end of the speculative boom is making homeowners, resale renovators, and condo-flippers less interested in knowing what their homes are worth. Cash-strapped Realtors are backing out of the program.” This leads to the question, how accurate is the values that a home owner ultimately gets from the system? and what is the motivation of the agent to provide an accurate value?, a topic that will be covered in just a moment.
Zillow: As puzzling as where they got their name is where they get the data from. Countless stories have arisen regarding the wrong information being recorded about properties # of bedrooms, bathroom, size, etc. No weight is given for overall condition or improvements. A quick review of the website shows the following: “Our data shows that the majority of our Zestimate home valuations are within 10% of the selling price of the home. Of course, to a certain extent this depends on the accuracy of the home data we receive.” 10% is the difference between your home selling and your home sitting. Fact is, with the average Sale price of Northern Virginia Homes for Sale being $507,546.40 in June of 2007, that is an amount of over $50,000 that the Zestimate could be off.
Homegain.com: A lead generation engine for realtors like Housevalues.com. Inquiries from curious homeowners are posted to the site that Real Estate Agents post resumes to, allowing the home owner to “compare agent”. Homegain takes a minimum of one third of the commissions from the listing agent as a “referral fee” leaving the agent with very little left to spend on the marketing of the home. This leads to Real Estate Agents given a proposed selling value that is over the market value or at least higher than the other agents proposal in an attempt to placate the owner, trying to secure the listing. This ultimately could cost the homeowner money.
When a house is listed for sale, the initial wave of buyers is the most important. When a house is overpriced, they categorize the home as overpriced, they move on to other properties & the Homeowners end up having to eventually dropping the price below market value just to get the attention of the market again.
All this because the agent was trying to gain favor or recover upfront cost (Housevalues) or cover referral fees (Homegain) in the end.
Your Local Real Estate Professionals CMA: Best bet is to have a comparive market analysis performed by a local real estate agent with specialty and expertise in your particular market & area. A good CMA lays out the comparison of the owners home to other homes that have recently actually sold and it also provides an opportunity for the Agent to show the techniques & marketing strategies that they will use to ensure that the home owner gets top dollar.
Truly, This approach also makes economic sense to the homeowner because the agent is not paying out as much in upfront or backend cost to a 3rd party intermediary that has no stake in the transaction. More dollars can be directed towards the promotion & exposure of your home to the marketplace & potential buyers, ultimately netting you more money, which is really what most home owners are looking for in the first place.
Robert Earl - Founder of The Earl of Real Estate Team is a Real Estate Entrepreneur based in the Northern Virginia. The Earl of Real Estate Team works with Chantilly VA Real Estate, Condos, Townhomes & Homes for Sale
Technorati Tags: HouseValues.com, Zillow, Zestimate, home valuation, Homegain, Real Estate Professionals CMA, Robert Earl
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March 6th, 2008 at 6:28 pm
Robert-
Hey, it’s Drew from Zillow. Our property data originates from public records available at county offices around the country. We rely primarily on 3rd party aggregators to gather that data. We realize that sometimes the public records are incorrect or outdated — that’s why we allow home owners to claim their home and edit their home facts.
On the question of accuracy — nationwide our median margin of error is 8.8%, with 32% of zestimates falling within 5% of sales prices. In virgina, our median margin of error is much better — 5.9%.
That said, Zestimates are a starting point, not the final word on home values. So, we 100% agree with you — they are not to a replacement for a CMA or appraisal by a local professional.