Like everywhere, 30A real estate buyers start their search for the perfect home or condo on the internet. And with hundreds of real estate websites available, buyers need to understand that over half of the information delivered is incorrect. Zillow is the largest and most popular Real Estate information site available with close to 100 million visitors a month seeking detailed information concerning hundreds of thousands of listings throughout the United States. Using this service may supplement the information you need to properly establish a realistic price on a property but don’t make the mistake of assuming that this information is “the” true gauge of market value.
Shoppers using this service, along with sellers and buyers, will quote these “Zestimates” to real estate agents when trying to determine a fair price. Here are a few things to keep in mind when using a national service that attempts to determine price:
Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates”. In this section they include what they call the VALUATION ERROR RATE by state and county. As an example, in New York County (Manhattan) the median valuation error rate is 19.9% ! In rural areas of California, the rate is as high as 26.6, San Francisco 11.6%. There is a real estate agent in Virginia that followed 21 sales in his city that had “zestimates”. 17 of those sales were overestimated in value and 2 of those sales sold for 60% less than the “zestimate” values. There are many areas of the country where these “zestimate” figures are in error 95% of the time.
The most important thing to remember here is that it is impossible to determine a fair market value based on computer information alone. Include these “zestimates” as no more than a starting point when discussing price with a qualified, experienced real estate agent who lives in the immediate area and knows the intangibles that are important in determining a fair market price. There is a saying that “all real estate is local” and it really is… As real estate agents here on Highway 30A in South Walton County, Florida, we receive many calls from people from all parts of the country who will reference a property they have viewed on Zillow. Most of the time, the property they are inquiring about has a “zestimate” that is far below the actual value and do not take into consideration the many local market factors that a computer does not process. Always read the fine or not so obvious print that these national services use when putting a market price out there. It is much more realistic to consider this information as a general estimate with a price range variance of 10 to 20%. Disparities like these can sour a potential buyer or seller if they view these numbers as totally reliable and that makes for a bad start to what should be a productive and informative relationship with a local Realtor.
Karen Holder, Broker/Owner Homes On 30A