Buying or selling a home is not a do-it-yourself job, just as pulling your own tooth or removing your appendix is not. I know you doctors and dentists are cringing at this point. I mention the latter two pieces of professional work to make it obvious to the individuals who might be the most self-assured. Some things are best left to professionals.
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July 2012 Zestimate and Actual Sale[/caption]In my career as Realtor in Orange County I have come across many a home buyer who readily pulls out Zillow's Zestimate and tries to justify his or her opinion of market value for a home when writing an offer. Funny enough, they never write offers based on Zillow's HIGH Zestimate, only the posted lowball values! Sadly, I have had more than one buyer lose a good house because a friend or relative second-guessed a solid market analysis and the proposed offer price.Hey, they argue, Zillow Zestimate says it is worth 25,000 less.
I decided to do my own research of Zillow Zestimate accuracy, because for some buyers, if I tell them Zillow is wrong, they don't believe until they see it, and that is usually after the closed sale to another buyer. I have accumulated Listing, Zestimate and SOLD data over the period of about five weeks during July/August 2012 for the city of Irvine. It's a small sample, but I venture to state that in Orange County, it is a representation of what the facts are. The variance of Zestimates vs. actual Sales Prices runs from Zestimate undervalued by -21.25% to overvalued by +35.16%. How would you like to be the buyer who assumes a home is worth 35% more than what it will sell for? On the flip side of the coin, picture the buyer who writes an offer based on the perception of the more than 20% lowball Zestimate, only to be beaten by the realistic and savvy home buyer who lets his real estate agent guide him in the actual market situation. I know that Zestimates are generated by a computer who has no idea of location, condition and upgrades. Zillow properly inserts a disclaimer that the Zestimate is not an appraisal. Of course, consumers take away the tidbit that justifies their preferred position, no fault of Zillow. Zillow will continue to post Zestimates; it's what brings visitors to its site and generates income through auxiliary services. The wild numbers are of some entertainment value and occasional annoyance to real estate agents but also a source of confusion for home buyers. In a changing market, whether it's going up or down, having up-to-date real-life information is crucial. When you want to buy a home in Irvine and greater Orange County, you might want to hire a live real estate agent and listen to the market analysis she offers.
For copies of the actual analysis spreadshett, please contact me via phone or email.
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Real Estate Matchmaker[/caption]