Why Don’t Online Home Valuation Tools Work?

Why are the estimates on Zillow and Trulia inaccurate? How do you know what your home is actually worth in the current market? We’ll go over everything today.

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Recently, we asked you to send in your questions, and today I would like to answer one that we got from Diane. Diane asks, “I would like to know why the estimates on Zillow and Trulia are so low. How can you get a real sense of what your house is currently worth?”

Zillow, Trulia, and other online home valuation tools use an algorithm to estimate your home’s value. The algorithm relies on other homes that have sold in your area, the age of your house, and the size of your house. The computer then takes all of that information and spits out a value.

Your local real estate agent or appraiser can help you figure out what your home is worth.

Keep in mind that because those values are computer-generated, there are many variables that those estimates do not take into account. Location is an important factor, too. For instance, a house on a busy street might not be worth as much as a house on a quiet cul de sac. A lot of those nuances are things that your local agent will be able to take into account.

Even if you look on Zillow’s website, you will see that they say the Zestimate is accurate within 7% of your home’s value about 50% of the time. That means that the other half of the time, the Zestimate is off by more than 7%. If your home is worth $200,000, that means Zillow is probably off by at least $14,000.

So, how do you know what your home is currently worth? As real estate agents, we can compare your home to similar properties in your neighborhood and give you a rough idea of your home’s value. We will look at the condition of your home, the upgrades and updates you have made, and figure out what your home is worth.

Another way to find your home’s value is to order an appraisal, which costs about $400. The appraiser will do a very scientific breakdown of the homes near yours that are similar in age and size. They will find the property most similar to yours and compare the two. For instance, if you have an extra bathroom or bigger lot, your value will be a little higher. On the flip side, if the other house is in better condition than yours, your value will be a little lower.

The reality is that your house is worth a combination of what you are willing to sell it for and what a buyer is willing to pay for it in the current market. If you have any questions about what your home is worth, just give us a call or send us an email. We would be happy to help you!

Where Have All the Short Sales Gone?

A few years ago, short sales were everywhere. You couldn’t mention real estate without talking about short sales. Now, short sales are scarce. What happened? 

Looking to sell a home in Athens, Georgia? Click here for a Home Price  Evaluation

Looking to buy a home in Athens, Georgia? Click here to perform a full home search

If you remember, just a few years ago, short sales were everywhere. These days, you don’t hear about short sales very often. What happened? Where did all of the short sales go?

In short, the market has changed. Home values have risen, the market has improved, and sellers are no longer being forced into short sale situations. 

A short sale is when the owner of the home owes more money than what the home will sell for in the current market. Since the market has improved and home values have risen, those sellers are no longer underwater. They’ve become solvent, so if they need to sell their house, they are able to sell it for more than what they owe rather than being forced to sell for less than what they owe.

Now is the best time to sell a home since 2007.

What does that mean for buyers? Since values are rising, you could’ve gotten a better deal last year than you will this year. However, you could’ve gotten a better deal in 2014 than you could’ve in 2015. The good news is that if this trend continues, you will get a better deal this year than you would if you wait until next year to buy a home.

As a seller, if you tried to sell your house a few years ago but were unsuccessful, it’s very likely that your home value has gone up. You can sell today for more than what you owe. It’s also very possible that you can sell for more than what you were asking a few years ago because the market has improved so much.

If you have been renting that house out and waiting to sell it, now may be the time to put it on the market. In fact, now is the best time to sell since 2007. We don’t know what the future holds; we’re hearing that some markets are slowing down, but the market here in Athens is still wide open.

I will keep you updated on the latest market trends as we move forward. If you have any questions in the meantime, just give me a call or send me an email. I would be happy to help you!