The internet is a wealth of do-it-yourself knowledge, but when it comes to determining your home value, it’s best to consult a professional.
Recent polls from The Mortgage Reports say that 44% of sellers check their home value using an online valuation tool. This often leads to an overly optimistic listing price—or worse, pricing too low. But despite the current hot seller’s market where it seems like anything goes, experts say you are better off using a local agent or service to help you pinpoint an accurate value.
Listen to the facts, not how you feel
It’s natural for homeowners to have strong emotions connected to the place where they live, especially if it is a house full of years of memories. Nobody wants the blood, sweat, and tears—not to mention money—they have invested into their home to go unnoticed or unappreciated. But being emotionally attached to the home makes it hard to remain objective and smart through the selling process. Unfortunately, the market and similar home comparisons are the only real deciding factor in how much cash you’ll get for your home.
“Many sellers have hubris and think their property is the best,” real estate attorney Suzanne Hollander explains in an article for The Mortgage Reports. “Oftentimes, their thoughts are incorrect. Too often, sellers aren’t familiar with comparable properties in their market.”
So, a quick check on your favorite real estate websites just won’t cut it. “Sellers should know where their home stands in terms of price and desirability versus other homes on the market,” Hollander says.
That Zestimate is probably wrong
Popular real estate website Zillow is transparent about the fact that their Zestimates are just estimates. Zillow’s website states that Zestimates have a median error rate of just under 2% for on-market homes, which doesn’t seem like much at first.
However, 2% of a $600,000 house is a cool $12,000. That’s how much homeowners could be overpricing (or underpricing) their home if they’re relying on internet real estate sites to influence the listing price.
Off-market listings can be even more erroneous, with Zillow’s average margin of error close to 7%. Most websites like Zillow use a combination of user-submitted data and public records information, which often doesn’t take into consideration when a house has recently been remodeled, or if the property tax information is old or incorrect.
Other websites like Trulia and Redfin also use similar formulas and data for list price estimates. The bottom line is that old phrase—don’t trust everything you see on the internet.
Do your homework
Real estate inventory is at its lowest level in years, resulting in a crisis nationwide as well as here in Utah, the Deseret News reports. But before you are tempted to list your house for whatever pie-in-the-sky number your heart desires, do some research. The Mortgage Reports polls showed that 58% of sellers spent less than three hours researching how to sell their home.
Most professionals recommend a minimum of 10-15 hours of research before listing. To get familiar with your market, visit comparable properties for sale and check all the sale prices in your area over the past year. A home value report can help you find much of this information if you don’t know how to get it yourself. This groundwork can help determine whether your house sits on the market longer than it should and whether you get top dollar. A long time on the housing market can be the kiss of death for a good home sale.
Speaking to Money.com, real estate analyst Noah Rosenblatt says, “Sellers assume they will have to negotiate anyway, so why not start high to come down to their price? Unfortunately, this tactic leads to longer days-on-market and steeper discounts compared to pricing at-market.”
In other words, listing too high can be counterproductive and end up getting you less cash in the end. Not to mention you will miss a whole market of buyers if you list outside their price range.
A real estate professional can help you list at the sweet spot so you don’t leave money on the table or get zero offers. A commission-based agent or For Sale By Owner aren’t your only options. Sell with Homie to get quality real estate service for a low fee. They can provide the support you need while saving you money. For more advice on pricing strategy, contact a Homie agent today.