Zillow to Determine My House Value in Philadelphia
An adage in real estate sales is “your home is worth what someone is willing to buy it for.” This suggests that there are many different factors, some arbitrary, that go into the valuing of a home. In today’s internet-savvy world, many look to industry leader Zillow for information. But the question is, “Should I Trust Zillow to Determine My House Value in Philadelphia?” Buying Property 215 primarily focuses on helping people find the actual value in their homes when they sell the property. We are a family-owned company that treats homeowners like family when it comes time to sell their homes.
Don’t trust Zillow for valuing your home. Here’s why.
Should I Trust Zillow to Determine My House Value in Philadelphia
Zillow’s Margin for Error
Zillow has been reported to average anywhere from 18 to 20 percent higher or lower in-home estimates. There are even reports of home values on Zillow climbing in declining market areas.
Let’s think about this for a second. For a $200,000 home, a 20 percent deviation is $40,000. For higher-priced markets like Los Angeles or Miami, a $1 million home could see unrealistic estimates varying from $180,000 to $200,000. That’s a huge difference in pricing.
Zillow estimates could discourage potential buyers who think a home is well out of their price range while giving sellers an unrealistic idea of a selling price point. In the end, this is the starting point of many disagreements homeowners have with selling agents regarding correctly pricing a home.
Homeowners see the price on Zillow and think that is the starting point for their home. Zillow’s home buying program recently went in the wrong direction. They had lately gotten overwhelmed when they decided to continue to pay cash for homes across the country. The company got so much into debt that it stopped home-flipping. This means they were not 100% positive on homes’ actual value and were either seriously underpaying or overpaying. It makes you second guess whether to turn to a company like this to determine the actual value of your home.
How Does Zillow Create Estimates
Zillow calls its proprietary estimating tool a “Zestimate.” Even with all the pricing factors placed into the formula, there is still a high margin of error because Zillow isn’t looking at your home.
The proprietary formula looks at the market pricing in the area. It will factor in the size of the house, the lot, and all home features, including the number of bedrooms, bathrooms, pools, and highlighted features. However, even Zillow will say this is a starting point for an accurate valuation of your home and should not be considered an appraisal or actual value.
The reason is the information Zillow uses is reliant on accessing public records and user input such as realtor sales. However, Zillow cannot discern if your home is the dilapidated eyesore in the community or the completely redone and upgraded home everyone is envious of.
Additionally, Zillow doesn’t discern community pockets. These are very common in larger cities where you can have higher-end community blocks from a mid or lower-end one. These “pockets” can be skewed by more extensive metro data that Zillow factors that aren’t pertinent.
The More Accurate Model
Any professional realtor will tell you that pricing a home to sell requires a complete understanding of the home itself, the location, and current market trends in that area. Most realtors look at Zillow pricing with disdain because it makes pricing and managing realistic client expectations more difficult.
A realtor will look at sales in the pertinent area, creating a radius based on your pocket rather than an entire zip code. He will then compare your home based on size, features, and upgrades to those homes that were recently sold, thus appraised, in the previous 3 to 6 months. This range is contingent on how hot the real estate market is in the area.
He will then compare this information to existing homes on the market, looking at how your home compares to what buyers see on the market. After all, if yours is a well-kept home being sold next to a completely remodeled home, you might not be able to get the same price per square foot at the other.
Additionally, realtors will consider whether it is a buyer’s or seller’s market. If you want to create a frenzy with many eyes on your property in a seller’s market, you can underprice the home and let the bidding begin. This tactic works in many markets, including Philadelphia.
The main idea when valuing your home is to stay close to your property. In Philadelphia, our streets are very close to one another. This means values can easily change block by block. Getting the exact value for your home could be tricky if you start pulling sold homes blocks from you. The other crucial factor is choosing homes similar to yours in square footage, bedrooms, and bathrooms. You want to stay within two hundred square feet of your home. If you own a thousand square foot property, do not compare your home to one 1300 square feet. The size makes a difference when it comes to home value.
There are other ways of determining the value of your home on your own. You can hire an appraisal to be done on your home. This is a great way to determine the exact value of your home. Though an assessment is not a forever number and is just for that period, it was done. If you are serious about selling your home, you will want to contact someone immediately. That way, you can ensure your asking price is reasonable and accurate.