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E-value

Posted by Brett Silver on January 31, 2013
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Let’s talk about E-valuation of homes.    Perhaps there are cities where the computer generated valuation system, used by websites like Zillow, can accurately estimate the value of a home.  Los Angeles is not one of those cities.  As a real estate professional, when I want to ascertain the value of a property, I am able to do so by studying other houses  around the subject property that have recently sold (i.e., the “comps”), make adjustments for location, size, quality, and intangibles.  People who are not real estate agents without access to such comps are relying more and more on these “zestimates” to determine property value.  Unfortunately, these valuations are inaccurate at best and completely off base a good percentage of the time.

I recently put my house on the market for sale, so I decided to check out Zillow to see the e-valuation – a factor which would certainly  influence perspective buyers.   I was dismayed to discover that Zillow had represented (and therefore, valued) my house completely inaccurately.  My house, which is 2,300 square feet on a 16,000 square foot piece of land, was listed onZillow as  1,400 square feet (the size before our rebuild 3 years ago) and the lot size at 4,000 square feet.  The “zestimate” was almost half of the listed price.  I was able to log into the website and change the specs of my house and lot, but unfortunately, the “zestimate” remained the same.  I spent the next week and a half calling and emailing Zillow to advise them that their inaccurate evaluation was negatively affecting the sale of my home.  Despite my persistence, I got no response from Zillow and was unable to get them to revise the “zestimate.”  .  I ended up changing the specs back to the original Zillow specs- at least the low evaluation could be explained by inaccurate data.  Needless to say, not the best strategy for selling our house!

I’ve heard similar stories from clients.  Even when Zillow has the correct specs of a house, the “zestimate” can still be inaccurate and  misleading.  Zillow uses a computer generated valuation system which looks at price and size of recent sales in the subject property’s area.  It fails to take into consideration important details such as what portion of the lot is flat and useable,  the condition of the house, how close to a busy street or flight path the house may be, views, and any other  element of the property which would affect its value – elements that you can’t see without knowing the area (and perhaps visiting the property).

Bottom line, if you want to know the true value of your home,call your real estate agent It’s our pleasure!

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