Zillow Isn’t the Gospel

So…you are ready to sell your home now, huh? If you are like millions of homeowners, you are going to Zillow immediately to see what your house is worth.

Even though Zillow claims its “Zestimate” is usually within 10 percent of the selling price of the home, don’t believe everything you see on the internet.

Don’t get me wrong, Zillow is an excellent resource. I use it all the time. But it isn’t the gospel. Why? Because even though Zillow gets a substantial amount of public data, it also allows for user submitted data. And let’s face it, if you are adding information about your home, you are always looking for the best angle. If a homeowner decides to update or change the square footage, number of bedrooms or features, it will change the value. Likewise, public data isn’t always perfect either.

In short, Zillow gives you a range based on its best data.

What’s the best way to get the most accurate value for your home? Well, that’s easy. Obviously, an appraisal is the best way. But that will cost you money, usually around $500 for a thorough appraisal. The other way is to know the “comps”, or comparable prices, of similar homes sold within a certain time period. I generally look at similar homes sold in the past 6-12 months within a mile of the subject property.

The key word here is “similar”. Not every property in the neighborhood is a good comp. At least not for buyers or real estate agents.

You need to take into consideration several factors to determine if a house is actually comparable to your property, such as:

  • Square footage (actual living space – plus it needs to be within 300-400 square feet)
  • Number of bedrooms
  • Number of bathrooms
  • Year built (a house built in 1910 is not a comp for one built in 2010)
  • Style of house (rancher, colonial, split level, etc.)

PLUS…

You need to know the condition of the property being compared.

  • Is it newly renovated?
  • Does it need major repairs?
  • Is there a lead paint issue?
  • Is the foundation sound?
  • Is there mold or termites?

All comps are not created equal. It’s that simple.

So, what’s the best advice if you are using Zillow to determine what your house in worth? Use Zillow, Trulia, Redfin or Realtor.com as a baseline, but ultimately seek out a professional opinion. If you have a Maryland house to sell for any reason, I have a simple form that you can fill out right HERE to get a no obligation offer. And if you want to see my methodology for how I assess home values and make offer, please click HERE

Advertisement

Keep it simple, Stupid!

As I mentioned in the previous post (which I am cleverly mentioning in vague terms so you will read it again), I felt like the well-intentioned celebrity foreclosure awareness campaign that kicked off in January of 2009 was a total train wreck.

The basic problem with the project was that there were way too many cooks in the kitchen. It was my understanding that the Fannie Mae Foundation was going to give HOPE NOW the $1.5 million and let the organization manage the project as we saw fit.

It didn’t happen that way.

Read More »

Celebrity Disaster, Part I

In late 2008, HOPE NOW received a sizable grant from the Fannie Mae Foundation to embark on a celebrity campaign designed to bring awareness to foreclosure prevention solutions and mortgage scams.

On paper it seemed like a worthwhile endeavor. The housing crisis was out of control and harnessing the power of celebrities, with ties to cities with major foreclosure issues, would go a long way in educating at-risk homeowners on the myriad mortgage solutions available to them.

Read More »

A New Player Emerges

As the mortgage crisis was transforming from a bad dream into a full blown nightmare in 2007, it was clear that a collaborative approach was the only way to deal with the unprecedented number of homeowners facing foreclosure nationwide.

The mortgage industry needed to not only band together, but it needed to bring the non-profits, Fannie Mae, Freddie Mac, mortgage insurers and other stakeholders to the table as well.

Read More »

Pointing Fingers and Placing Blame – The American Dream Becomes a Nightmare

One of the most interesting facets of the early days of the housing crisis was the blame game being played out on a daily basis in Congress, in the media and on the internet.

The consumer groups blamed the banks. The media blamed the banks. The government blamed the banks. And vice versa. Plus, the banks blamed the investors. Everyone blamed Wall Street. It was vicious cycle with everyone looking for easy answers as the economy sank into recession.

Read More »

Cram Down? Say what?

My time at the Mortgage Bankers Association was critical to my career, but honestly I wasn’t passionate about the work. It was interesting and I worked with amazingly talented people, but I never felt a real calling there.

This “journey” I am chronicling is definitely going to focus more on my work after MBA, but I am going to write about a few select moments from my MBA experience that will put my later role in the housing crisis into perspective. Translation – this entry will be longer than normal.

It was at MBA where I really learned about the major players and the issues behind the recession, and their effect on the mortgage industry, the housing market and the nation’s homeowners.

Read More »

Trial by fire…and snow

My consulting career didn’t exactly start off so perfectly in December of 2007. It would be easy for me to blame my tardiness that day on the snow storm that rolled through the DC area, causing major traffic in my neighborhood.

But the truth was that I overslept. The snow, and its inevitable ability to turn bad Maryland drivers into absolute commuting nightmares on wheels, just made it worse.

Read More »