Are you familiar with Zillow's value estimates that they call Zestimates? They are a computer generated home valuation based on recent sales prices of other homes in the area. The problem is they are usually not very accurate. I have seen some very inaccurate values from them. In late 2016 I listed a Fort Lauderdale waterfront property. Zillow had estimated its value at $1,450,000 which I knew to be way too high. The day I listed the property at $1,250,000 the Zestimate dropped by $200,000. The home sold quickly for $1,150,000, which was about what the owner and I were targeting. That is a $300,000 error! In my experience their valuations seem to always be on the high side. Could it be to encourage home owners to sell? I wouldn't doubt it. Most of their revenue comes from selling buyer and seller leads to real estate agents.
How Accurate is Zillow?
The reality is they are usually way off.
Zillow publishes the accuracy statistics of their Zestimates right on their site. You have to know where to find it but its buried there somewhere. See the chart I captured above. For example their Fort Lauderdale Zillow estimates are within 5% of the actual sales price only 55.4%. From my point of view, as someone who makes a living valuing and selling homes, this is information is only good in a ball park sense, not as an accurate number to list a property for sale or to purchase. It is impossible for a computer to account for all the important factors that will affect value such as condition, views, and adverse influences such as traffic and noise. All homes are different, and when you get right down to it they are worth what a ready, willing and able buyer is willing to pay for it.
When the time comes to list your home for sale, take that Zestimate with a grain of salt. It can not replace a trained professional. It is very important to start with a realistic price because homes that linger on the market too long become stale and harder to sell even if they eventually do adjust to the correct level.
Homeowners that attempt to sell their home on their own, far too often rely on Zillow to help them set an asking price. Even if you are selling your home on your own, many agents would be happy to give you their opinion at no cost. That's because they know you may eventually need their help to sell it down the road. I happen to be one of those agents. If you would like a Comparative Market Analysis, just ask, I'd be happy to do it for you.
A Better Idea Than Zillow For Fort Lauderdale Homeowners
An even better idea would be to hire a licensed appraiser. I encourage this with most of my customers. I do this because no matter how good at it I am at estimating value, there will always be a perceived bias. It is often assumed that since I'm selling the home I want it priced for an easy sale. An impartial third party opinion is well worth the cost, and I will even cover that cost with a credit at closing for my customers who hire an appraiser. An additional benefit of having an appraisal in writing is it's a great tool when negotiating the price with a prospective buyer.
One final note, Zillow’s CEO, Spencer Rascoff, sold his home for 40 percent less than the Zestimate showed in 2016!
Related:
Here is What Will happen When You Seek an Agent From Homelight
The Hidden Costs of Holding on to a Vacant Property
The Best Time For Selling Real Estate in Florida
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Serving The Greater Fort Lauderdale area since 2006
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