Phoenix Broker notes that Zillow overrated homes. Here’s how to find the actual list price

If you’re looking to buy or sell a home in the valley, do your homework.

PHOENIX – In the hot Phoenix real estate market, many homeowners are considering selling it, especially as home value growth has increased more than 15% since December 2019.

But Phoenix real estate agents find that sites like Zillow, which use an automated valuation model to determine the value of a home, overestimate the real value of a home.

How do you know that a home estimate is too good to be true?

“It’s usually one of our big questions … ‘hey, but the Zestimate says that …'” said Aaron Carter, associate broker and co-founder of the CarterMosier Group at HomeSmart.

If you’re looking to buy or sell a home in the valley, do your homework. Carter says overestimating home values ​​is common in certain locations like Zillow.

“Zestimates are what we call automated valuation models. They are not always 100% accurate,” he said.

Carter says automated calculations are a starting point, but they cannot replace what people can do to find out the real value of a home.

How can experts help find out the real value of your home?

“We’re doing what is called a comparative market analysis, a CMA,” said Carter. “This looks at closed, previous sales of similar homes, and then we add or subtract the value based on age, other criteria like location, size of conditions, features, and amenities.”

In other words, there are many things AVMs use that Zillow may not be able to capture, like the most recent or full public records.

Zillow and researchers know that there is a margin of error

Zillow admits that they have a margin of error that varies from region to region created on his website.

When does Carter most often find overestimations?

“The times a seller might not get the high listing price is when the property needs some work,” he said.

Other researchers agree with Carter. In a 2014 research report, titled “Accuracy of Zillow Estimates for Home Value,” researchers found that relying on Zillow as a home pricing tool is questionable.

“While Zillow can be a useful tool for getting an ever-changing view of property prices, you shouldn’t be betting the ranch on it,” wrote the paper authors Dr. Charles Corcoran and Fei Liu. “”Even the best results on the four-star market lead to an average error rate of almost 10 percent. An accuracy of 10 percent still implies an error greater than $ 20,000 for an average price property. “

The Zestimate® home valuation model is Zillow’s estimate of the market value of a home. The Zestimate contains public and user-submitted data taking into account the facts of the home, location, and market conditions. The accuracy of the Zestimate depends on the location and availability of data in an area.

How can homeowners protect their home value?

Carter says this is why it is important homeowners hoping to capitalize on market demand and keep their properties in the best possible shape.

“The natural world is in a constant state of decline,” he said. “Once you paint this house and make it beautiful … there will be something you can improve on.”

He suggests setting aside a small budget every year to look after your home.

“If you take care of your home, your home will take care of you when it’s time to sell,” Carter said.

According to a Zillow spokesman, Phoenix led all major metropolitan areas in annual home value growth, up 15.3% from last December, taking the lead from San Jose, up 15.2% year over year, and stopped in front of Salt Lake City, Seattle and Austin.

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