Learn the Advantages of an Accurate Real Estate Estimate and How to Get One

If you are considering the sale of your home, knowing your home's value is essential for pricing it accurately to get buyers interested. Whether you are considering a sale or just curious, it is always a good idea to keep on top of valuations, if for no other reason than to determine your ROI.

No matter what motivates you, having an accurate understanding of your home's estimated market value can come in handy. Today, there are several ways to do that, many of which are free and within reach online. However, some methods are better for getting an accurate real estate estimate than others.

This post will compare working with a professional agent to get a real estate estimate of value versus sourcing the information online at a website like Zillow.

Finding A Real Estate Estimate On Zillow

In today's internet age, technology has given us the ability to perform many tasks ourselves. As buyers and sellers have become savvier, the first stop on the journey to buy or sell a home is the internet.

Online tools and home value estimators are everywhere! While you have multiple platforms to choose from, one of the most popular is Zillow. But is a "Zestimate" as a Zillow estimate is known, accurate?

So, what is a Zestimate?

This is Zillow's version of an online home valuation platform and can give you an estimate on over 100 million homes all over the country. Zillow's algorithm automatically computes values. These are based on both public-submitted as well as user-submitted data points for each property.

Like many online value calculators, The accuracy of a Zillow Zestimate will vary widely based on several factors, including your location and how much data is available.

While online sites like Zillow are helpful, you should never rely on them to make an accurate real estate estimate of valuation. Whether you are a buyer or a seller, you want accurate information to make an informed decision.

Sites like Zillow have the potential to empower buyers and sellers. They have replaced the world of comparable sales and values that were once understandable only to real estate professionals. They give both buyers and sellers the ability to learn useful information about properties in their area, including their own.

Sites like Zillow do their best to provide accurate information as to the value of your home. However, Zillow is an automated system that is based on mathematical formulas and data analysis. It does not think for itself. It cannot account for variations – changes that can substantially affect the price of a home from any sort of "average."

When you are buying or selling, you cannot afford to be off on your real estate estimate by tens of thousands of dollars in your pricing or bidding!

How a Real Estate Professional Determines Value

While Zillow is fine if you are seeking a general idea of value, the fact is, analysis and a real estate estimate provided by a real estate professional will be more accurate. Real Estate professionals specialize in answering the question, "what is my home worth?" They do this for their clients by running a comparative market analysis. This consists of finding similar properties, or comps, that sold within the past 90 days and using this factual data to prepare their valuation.

The most accurate comp is a nearby home that is similar to yours in terms of square footage, bedrooms, and bathrooms. Ideally, the lot size is also similar. Once your REALTOR® finds a few comps in your area, they will average these figures to determine a baseline home value.

Today, sellers need to take into consideration that home buyers begin their search for properties online. Assume your agent has provided you with a real estate estimate that values your home at $503,000. Most people will search for homes using $20,000 or $25,000 increments.

That means listing your home at its market value of $503,000 could prevent your listing from being seen by buyers searching the $475,000 to $500,000 range. Asking $500,000 for your home in this instance might generate more traffic and maybe even a bidding war that can push your final number well above your expectations!

Why Accurate Pricing is Crucial

If your real estate estimate is too high, your home can sit on the market, even in a seller's market. Valuing your home too high can be a big problem. If your home stays on the market too long (over 30 days), it can become stigmatized. Buyers often get suspicious when they see that a home has been on the market for an extended period. They may think that there is something wrong with the property.

If that is the case, the seller may need to significantly reduce the price, sometimes below market value, to generate interest. However, pricing your home below market in an attempt to generate interest and multiple bids can also backfire. Granted, in a hot seller's market, like we're living in right now, that strategy can be effective. However, pricing too low can lead buyers to assume that your property is only worth the list price.

While sites like Zillow can be helpful in the information gathering stage, your best bet is to work with a real estate professional. They can help you to price your home accurately and list it for close to the figure. When you are in doubt, turn to your local real estate professional. They understand your market and will help you cut through the haze to pinpoint the right price for your home.