Zillow was introduced years ago and since then has become a major force in the real estate industry. Zillow isn’t a real estate company although the site shows millions of homes for sale and rent in all parts of the country. Instead, Zillow is a database and draws listings from multiple sources and works with multiple newspapers, publications, and real estate web sites to feature and promote its services. One of these services is one of the more popular ones- providing value estimates online for free. Homeowners can type in their property address and view a “Zestimate,” which is Zillow’s version of property valuation or appraised value. But many times, the information is dated or simply incorrect. Potential homebuyers can also log onto Zillow and get estimates for different properties.
One of the major valuation data bits used is square footage. That’s to be expected somewhat because Zillow doesn’t visit the areas being valued. For instance, there are two 3,000 square foot homes. One is in great shape but the other needs some major work inside. But Zillow will price both of these homes nearly the same due to the square footage of the property and the size of the lot. There is also little room for adding home improvements like a newly remodeled kitchen, it won’t be recognized. Yes, Zillow does encourage homeowners to add comments and improvements made directly onto its site, but that information is directly the responsibility of the homeowner.
The missing link here is “boots on the ground.” No one knows the local real estate market better than experienced real estate agents and appraisers. Agents know what’s selling and what’s not and how to fairly price your home. Someone local knows the neighborhoods and demographics. Are certain parts of town suddenly “hot” while others are cooling down? What’s the quality of the schools in the area? Commute times? New businesses coming to town? Zillow won’t do any of these things. You’re kind of on your own.
But here’s the deal- if you’re going to buy a home, you need an agent to not only craft the right offer but to also negotiate the list price, closing costs and negotiations. As a buyer, you don’t pay your agent anything for these professional services- the sellers do. If you’re listing your home on your own, you’re going to be negotiating with professionals who make offers to sellers every day. Experienced real estate agents are extremely good at what they do. They’re professional negotiators and while you may think you’re pretty good about negotiating, in all likelihood you’re out of your league. Agents actually take classes and attend seminars on negotiating and their job is to get their clients the very best deal they can get.
And it’s not just Zillow. Other sites that also display homes for sale rely, as does Zillow, on ad sales, not any sales commission. These other sites also have marketing agreements with Zillow that allow them to pull listing data from Zillow’s database. Trulia is another site that displays the very same listings with the very same database. In fact, Zillow bought Trulia outright in 2015. That’s why the format and user interface are nearly identical.
The online websites can be a great tool for basic research, but the best way to get a value on your home is with a realtor that knows your area. Your home may be in excellent condition with awesome upgrades but online price valuations may not count for much. Again, these websites can provide you with a start, but don’t take that information for granted at all. You could be selling yourself short, big-time.
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