Catching Some ZZZZZs
The process of buying and selling real estate has been fundamentally transformed by the big Z..Zillow , that is. Anyone who is remotely interested in ANY home can gain loads of information, including pricing, through this easy to use website.
Shoppers, sellers and buyers routinely quote Zestimates to realtors — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers' list price of $425,000. Or a seller might demand to know from potential listing agents why they say a property should sell for just $595,000 when Zillow has it at $685,000.
Disparities like these are daily occurrences and, in the words of one realtor who posted on the industry blog ActiveRain, they are "the bane of my existence." Consumers often take Zestimates "as gospel," said Tim Freund, an agent with Dilbeck Real Estate in Westlake Village. If either the buyer or the seller won't budge off Zillow's estimated value, he told me, "that will kill a deal."
But just how accurate is Zillow when it comes to its home values, or Z-estimates? And if they're off the mark, how far off? CBS This Morning recently interviewed Zillow CEO Spencer Rascoff and posed that question. Rascoff answered that they're "a good starting point" but that nationwide Zestimates have a "median error rate" of about 8%.
Whoa. That sounds high. On a $200,000 house, that would be a $16,000 disparity — a lot of money on the table — and could create problems. But here's something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. So how does the Colorado River Real Estate market fare? According to Zillow's statistics, Mohave County falls in line with the National error rate, coming in at an 8.1% error rate. They also disclose, however, that only 34% of the Zestimates were within 5% of the actual sales price. La Paz county is much worse with a 14.7% error rate. WOW!!
The bottom line is that a Zestimate can be a good starting point, but a professional realtor with a pulse on the market is your best bet when it comes to home pricing. If you're looking to buy or sell, I'd be happy to help you!
* source: http://www.latimes.com/business/realestate/la-fi-harney-20150208-story.html