Purchasing Your Home

Any major purchase requires research, careful analysis, consideration, and thought. Home buying isn't any different! Determining the right location, the number of bedrooms or bathrooms needed, and outdoor space is the easier things. However, there are many other factors to think about in your home search. From your initial search to the moment you get the keys to your new home, I will be there, guiding you through the process. I can even help connect you with mortgage professionals to get the best rates. 

As an area expert, I can help educate you on the different neighborhoods, schools, and other local community amenities that suit your lifestyle. 

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As your buying agent, I can help streamline the process of buying a home and make it easier for you. I’ve aligned myself with the top professionals in the industry, and once an offer has been accepted, I will personally help facilitate the process to close on the home. By working closely with mortgage brokers, title and escrow companies, home inspectors, and home warranty companies I will provide you with the best service possible!

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Erroneous Zestimates

Zillow’s wildy off online price estimates hamper sales By Kenneth Harney [photo Spencer Rascoff]

When “CBS This Morning” co-host Norah O’Donnell asked the CEO of Zillow recently about the accuracy of the website’s automated property value estimates, known as “Zestimates,” she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and likely pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.

Shoppers, sellers and buyers routinely quote Zestimates to real estate agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the seller’s list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000, when Zillow has it at $685,000.

Disparities like these are daily occurrences and, in the words of one agent who posted on the industry blog ActiveRain, they are “the bane of my existence.” Consumers often take Zestimates “as gospel,” said Tim Freund, an agent with Dilbeck Real Estate in Westlake Village, California. If either the buyer or the seller won’t budge off Zillow’s estimated value, he told me in an interview, “that will kill a deal.”

Back to the question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off? Zillow CEO Spencer Rascoff answered that they’re “a good starting point,” but that nationwide Zestimates have a “median error rate” of about 8 percent.

Whoa. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. 

But here’s something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates.” This section provides helpful background information, along with valuation error rates by state and county — some of which are stunners.

For example, in Manhattan, the median valuation error rate is 11.1 percent — which could translate into a $109,000 disparity on an apartment selling for the median $980,000. In Brooklyn, the error rate is 10.4 percent. In some rural counties in California, error rates range as high as 32 percent. In San Francisco, it’s 11.2 percent. With a median home value of $1 million in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $112,000.

Some real estate agents have done their own studies of accuracy levels of Zillow in their local markets. Last July, Robert Earl, an agent with Choice Homes Team in the Charlottesville, Virginia, area examined selling prices and Zestimates of all 21 homes sold that month in the nearby community of Lake Monticello. On 17 sales, Zillow overestimated values, including two houses that sold for 61 percent below the Zestimate.

In Carlsbad, California, Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP codes. He found that Zestimates came in below the selling price 70 percent of the time, with disparities ranging as high as $70,000. In 25 percent of the sales, Zestimates were higher than the contract price. In 95 percent of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP code, Dowler found that 100 percent of Zestimates were inaccurate, and that disparities were as large as $190,000.

So what do you do now that you’ve got the scoop on Zestimate accuracy? Most important, take Rascoff’’s advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — experienced agents and appraisers. Zestimates are hardly gospel.  Often, far from it.

Kenneth Harney is a syndicated columnist.