What’s Your Home Really Worth?
Automated valuation estimators based on properties sold in the area, such as Zillow’s Zestimate, which is shown on all active listings, are popular among customers, even though the values are notoriously inaccurate, and often cause headaches for REALTORS® when buyers or sellers take these unreliable numbers too seriously.
It’s worth noting that sites have different policies about these tools. For example, realtor.com® only provides values for off-market properties, not active listings or those sold within six months. Trulia doesn’t show valuations on active properties, but shows them immediately when they go off market.
Woolley says, “Does it frustrate agents? Yes it does. But the better agents have figured out how to leverage these automated valuations to their benefit. The correct approach is to explain that it’s an automated valuation based on information available over the last year, and offer to provide more accurate and current valuation through a full market analysis.”
Scott agrees. “Most consumers realize that electronic valuation tools aren’t really that accurate and certainly won’t entirely trust that type of tool in a transaction as significant as a home purchase or sale. In many cases, these tools actually validate the need for a real estate professional to showcase their market knowledge.”
Klein encourages all REALTORS® to bring the automated valuation data to all listing presentations, since buyers clearly have them. “Take the Zestimates with you, and be prepared to substantiate or debunk it based on data from the MLS, which you know is superior. You can easily turn the tables, because as a member of the MLS, you have access to more timely, accurate valuation data.”