When pricing your home, you should only use Zillow as a starting point. An experienced Realtor or an appraiser will tell you the real value of your home and at what price you should list it.
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If you’ve never been on Zillow or Trulia, they’re two of the largest real estate websites in the world. Zillow is known for it’s Zestimate, their customized home valuation estimate.
Zillow and their Zestimate have been in the news recently because they’re being sued by an attorney in Illinois who claims her home sale was impaired because the home’s Zestimate was quite a bit below the price she listed it at.
Realtors love to hate Zillow, but I love Zillow. We do a tremendous amount of business with them, and I believe they’ll be the Amazon of real estate. I’ve met Zillow CEO Spencer Rascoff and had the pleasure of sitting down with him a few times. He’s a brilliant guy who’s going to dominate the real estate industry with Zillow.
What does Zillow’s lawsuit mean for you, though?
First, it’s important you understand that Zillow is just the starting point for a home valuation. My friend Barbara Corcoran was on “Good Morning America” not too long ago talking about this lawsuit and reaffirming this opinion. You can watch her appearance in its entirety here.
Zillow should only be a starting point for pricing your home because it doesn’t know about important details you may have made to your home. If you’re interested in selling your home, it’s important to get the professional opinion of someone who’s been through your house.
I’ve been a state-certified appraiser for more than 20 years now. The appraisal process—and what it took for me to get my own appraisal license—is very different than what it takes for a real estate agent to give you a market analysis. I had to work for two years under a professional appraiser, take 150 hours of state-mandated courses, and pass several exams. Random samples of my work also had to be examined by state examiners. Only after all that was completed was I finally granted my appraiser license.
A typical Realtor, on the other hand, takes a 75-hour licensing class. Of that, only two or three hours are spent on home valuation. After that, they’re deemed “qualified” to do a home valuation. If you’re listing your home, have it valued by an experienced appraiser or at least a Realtor who’s been in the business for 25 years. If not, you could wind up in the same situation as the person suing Zillow and relying on a Zestimate that’s as far as 15% to 20% off your home’s real value.
Using an inexperienced Realtor can do the same amount of harm. For example, I received a call this week from a potential client we’ll be listing in a few short weeks whose home had been on the market for a year. It was originally listed at $165,000 and is now down to $120,000 under the guidance of this person’s current Realtor. The mistake this Realtor made was grossly overpricing the home. This client told me that they knew the Realtor had overpriced the home, but they decided to trust them because they were the professional. That mistake literally cost this person thousands of dollars in carrying costs over the past year. Additionally, the home will ultimately sell for less than what it would’ve if it was priced right from the beginning.
If you have any questions about your home’s value in this market or how you can maximize the return on your house once you decide to sell it, please don’t hesitate to call me. I’d be happy to help.