Zillow is one of the
top real estate sites in the world. It
is an incredible real estate online site offering information to consumers
wanting to make informed decisions. The
mobile version and the desktop applications both work exceptionally well, and
can provide buyers with information on properties available for sale and
property information on homes & parcels not on the market. The mapping feature allows consumers to “hone
in” to the neighborhoods and homes they desire.
Zillow has another
feature that many buyers and sellers utilize.
It is the Zestimate, and according to Zillow, it is a home valuation of
the estimated market value of a property, computed using a proprietary
formula. Zillow suggests its use as a
starting point in determining a home’s value, and they further recommend having
a Realtor® complete a comparative market analysis or getting an appraisal. They acknowledge the limitations of the
Zestimate, a compilation of public records, and Zillow has not inspected the
home or is knowledgeable about special features.
Unfortunately, many
consumers have not read about those limitations and recommendations, and often
count on the Zestimate to be a correct market value of the property.
When the market value
is higher than suggested by a Realtor’s® comparative market analysis, sellers
want to believe the Zillow Zestimate is accurate, and it can lead to a home
being marketed at the wrong price. As
pricing is one of the most critical functions in marketing a home, a higher
than market price can lead to long “days on the market” and potentially, the
lack of a sale.
The Durango area is a unique market, and far
different than the metropolitan areas.
Most of the big cities are dominated by large developments of similar
homes, and estimating value based on other home sales is far easier. In La Plata
County and in Durango, almost all of the homes were
designed and built individually, with a variety of materials, different levels
of customization, and large differences in size. It is not unusual to have homes in very
different price ranges next to each other.
You can drive down Durango’s
3rd Avenue
as a simple example.
Unfortunately, when
the Zillow Zestimate is low compared to the market value of the property, buyers
want to utilize it as having more integrity than it deserves, and of course,
sellers are often angry at the Zillow Zestimate, as it makes it more difficult
to negotiate a transaction.
I have personally
seen Zillow Zestimates that are hundreds of thousands of dollars different than
the market value.
In conclusion, use
Zillow to search for properties, and by all means, take a look at the Zillow
Zestimate, but be careful in believing that it is correct. Utilize your Realtor® to help you determine
the correct market value, and perhaps turn the Zestimate into a Zactimate!
Don Ricedorff, Broker Associate, GRI, CRS, CCIM, ABR, RSPS, CDPE
E-Mail: don@durangorealproperty.com
Direct: 970-375-7014
Fax: 970-259-5007
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