An old adage in real estate sales is “your home is worth what someone is willing to buy it for.” This suggests that there are many different factors, some arbitrary that go into the valuing of a home.
In today’s internet savvy world, numerous glance for information to industry leader Zillow. But the question is, “Should I Trust Zillow to Determine My House Value in New Jersey?”
Here’s why you should not trust Zillow for valuing your home.
Should I Trust Zillow to Determine My House Value in New Jersey
Zillow’s Margin for Error
Zillow has been reported 18 to 20% average higher or lower in-home estimates. There are even reports of home values on Zillow climbing in declining market areas.
Let’s think about this for a second. For a $200,000 home, a 20 percent deviation is $40,000. For higher-priced markets likeNew Jersey or Miami, a $1 million home could see unrealistic estimations varying from $180,000 to $200,000 or more. That’s a huge difference in pricing.
It could discourage potential buyers that think a home is well out of their price range while giving sellers an unrealistic idea of a selling price point. Hence, this will be the starting point of disagreements homeowners are having with selling agents with regards to properly pricing a home.
To simplify: homeowners see Zillow’s and so as to think is the starting point for their home.
How Does Zillow Create Estimates
Even with all the pricing factors placed in the formula, a high margin of error is instill because Zillow isn’t actually looking at your home. Zillow calls its proprietary estimating tool a “Zestimate.”
In addition, Zillow doesn’t detect community pockets. These are very common in larger cities where you can have a higher-end community just blocks from a mid or lower-end one. These “pockets” can skew or be skewed by larger metro data that Zillow factors in that aren’t pertinent.
The More Accurate Model
A professional realtor will tell that pricing a home to sell requires a full knowledge of the home itself, the location, and current market trends in an area. Most realtors look at Zillow pricing with a small of despising because client’s expectation does make pricing and managing realistic more dificult
A realtor will look at sales in the pertinent area, will create a radius based on your pocket rather than an entire zip code. Then He will compare your home based on size, features, and upgrades to those homes that were recently sold, thus appraised, in the previous 3 to 6 months. This a contingent range on how popular the real estate market in the area.
The information will be compared to existing homes on the market, to see how your home compares to what else buyers are looking on the market. After all, you might not be able to get the same price per square foot at the other if yours is a well-kept home being sold next to a completely remodeled home.
Realtors will consider whether it is a buyer’s or seller’s market. You can underprice the home and let the bidding begin. if you want to create a frenzy with a lot of eyes on your property in a seller’s market. The tactic will definitely work in many markets including New Jersey.