Profile picture for garydean

I am completely baffled as to how you come up with your estimates.

We have a larger house on a larger lot built the same time as neighboring homes, and have a higher assessment.  Yet Zillow has us significantly lower on the estimate.  Where do you get your numbers?
  • March 10 2011 - Ashburn
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Answers (19)

Profile picture for Blue Nile
Yes, we know all about the National Association of Realtors®' "education", such as their 101 "talking points" for example as used in 2004.... "No one every loses money on Real Estate", "Prices always go up", "what goes down must go up", "now is the best time to buy", "buy now or be priced out forever"...

It appears to me that quality licensed agents should stop buying into "NAR's education", and should start accepting some "education" from the public and statisticians instead...

It doesn't do any good to "have all the comparables at your finger tips" if you haven't been in all of them and done a line itemization of each.

Besdes, everyone  now has all the comparables at their fingertips, and still only Appraisers are licensed to do appraisals.

If a Realtor® wants to give opinions of approximate value that have some weight in court or with a financial institution, or with a buyer or seller concerned about their own finances..., that agent really should get licensed as an appraiser.  It isn't that hard, but it does take a little more course work and tests that people than want to be Licensed Real Estate agents don't need.
  • September 02 2011
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Appraisers are ran out of a pool, to keep an "arms length transaction". That means you can have an appraiser who comes from an hour away to perform the appraisal. This isn't the area he/she lives in, and may seldom even do appraisals there. Yet this information is relied upon solely for valuation. There are times when Realtors have to educate....

As mentioned before, Zestimates should not be relied upon for valuation.

A Realtor could educate you also on your homes valuation, as they have all the comparables at their fingertips.

Good luck!
  • September 02 2011
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Profile picture for hpvanc
Vivian, answers do not work. 

1.    All CMA's generated by an agent are not submitted for accuracy review against all properties that sell within 90 days.  Since individual consumers do not have access to that they have little ability to evaluate the accuracy of an agents CMA's unless they have asked the agent to generate an extremely high number of CMA's.

2.    Maybe on this one, however if you are generating them for properties are not selling there is really no way of telling if they are accurate.

3.    Since you are not submitting all of your CMA's for 3rd party accuracy review.  How many single individual clients do you have that are asking for enough CMA's that they can independently evaluate your CMA's against 50+ sold properties before they list their property or make an offer on one (the timeline on this one is not specific)?  That is the only way they can evaluate your CMA's without having them all submitted to a 3rd party for accuracy review.

  • September 02 2011
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Q: Do you provide 3rd party verified accuracy statistics with your CMA's? 

ANSWER:
Yes. Real estate agents have access to the Multiple Listing Service - MRIS - it is the most reliable source of real estate information available.

Q: Are your CMA ranges and price recommendations identical regardless of whether you are providing it to a buyer or seller? 

ANSWER:
Yes. Always.
Sellers will not sell unless they know they are getting a fair market price and buyers will not purchase unless they know they are getting a reasonable deal.

Q: Without that kind of verification, unless someone has worked with you or a specific agent and verified your CMA's against at least 50 closed transactions I consider the CMA to be less than worthless. 

ANSWER:
Only big cities have 50 transactions per month of COMPARABLE sales in the same area (ex. condominiums).
Many neighborhoods in Northern Virginia have a few sales per month (or per year), so CMA of 50 comparable sales is simply unrealistic.   

  • September 02 2011
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Profile picture for hpvanc
Vivian,

Do you provide 3rd party verified accuracy statistics with your CMA's?  Are your CMA ranges and price recommendations identical regardless of whether you are providing it to a buyer or seller?  Without that kind of verification, unless someone has worked with you or a specific agent and verified your CMA's against at least 50 closed transactions I consider the CMA to be less than worthless. 

If there is any indication that marketing intentions and biases could color the CMA unfortunately they aren't worth the paper they are printed on.  Most people don't work enough with a single agent to allow the agent to legitimately earn the trust necessary to use CMA's without a 3rd party verification system and as a result there are going to be many people that will believe AVM's like the Zestimate before they will believe a CMA.  Maybe it is time that agents start becoming true professionals instead of just selling themselves as "professionals".
  • September 02 2011
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>>>A Realtor®'s CMA is just marketing propaganda as the "sales agent" is only licensed to do "selling".<<<

@ Pasadenan,

CMA is only as good as the agent preparing the CMA. Likewise, an appraisal is only as good as the appraiser preparing the appraisal.

Personally, I never prepare a CMA unless I can see the property physically in person and compare it to other recently sold properties in the neighborhood/area.
 
A professionally prepared CMA by a knowledgeable and experienced real estate agent can be as good as an appraisal - sometimes better. However, for financing purposes, in order to avoid potential conflict of interest, only independent appraisers are used by purchasers' lenders. 

Again, CMA is only as good as the agent preparing the CMA.

 
  • September 02 2011
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Profile picture for Blue Nile
The buyer and seller decide the price together, and if the buyer needs a loan, then the appraiser's opinion of the value substantially impacts whether the loan is funded and the funding contingency removed from the offer.

An appraiser's opinion matters.  A Realtor®'s CMA is just marketing propaganda as the "sales agent" is only licensed to do "selling".

Similarly, the IRS will accept an appraisal from a licensed appraiser for the value of a property on a given date for tax purposes, but not a CMA.
  • September 01 2011
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Both, CMAs and Appraisals are professional opinions of the market value.
In the end, it is the BUYER who establishes the market value and it is the BUYER's opinion that matters the most.
  • September 01 2011
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Profile picture for Blue Nile
"It would be a huge PUBLIC DISSERVICE to say that Realtor®  CMA's represent market value of properties - they do not."

Now if they did, there would be no need to mark the list price down, and no need to "negotiate", and no need for any appraisals, would there?
  • August 28 2011
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>>>Realtors® are not qualified to do appraisals.<<<

@ Pasadenan,

Appraisal is ordered by purchaser's lender to establish the market value of the property for the financing purposes. By LAW, lenders are required to use independent appraisers.

Realtors do NOT prepare appraisals - unless they are licensed to do appraisals.  

 
  • August 28 2011
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Profile picture for sunnyview
A Zestimate is not an appraisal. It is mainly based on sales trends, public record information, assessed values etc. You can read more about the Zestimate and how they calculate it here. Hope it helps.
  • August 28 2011
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Profile picture for Blue Nile
An appraisal also requires a site visit (including the interior) by a licensed appraiser, and line item itemization of each characteristic.

Realtors® are not qualified to do appraisals.

Boycott the National Association of Realtors®.

Join the American Association of Realty Agents instead.
  • August 28 2011
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Profile picture for ProvidentMike
Anytime a home value is based on an algorithm it won't be accurate.  It takes a real person with experience to weigh the value of comparable sales in the neighborhood and make adjustments based on lot size, interior upgrades etc.
  • August 27 2011
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It was quoted numerous times here on Zillow that tax assessments are one of the sources for zestimates.

Zillow has MANY strengths - for example, Q & A forum - but zestimate is NOT one of them. It would be a huge PUBLIC DISSERVICE to say that zestimates represent market value of properties - they do not.  
  • March 10 2011
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Profile picture for wetdawgs

Vivianne:   Do you have some documentation from Zillow saying they are using the tax assessments to come up with Zestimates that you can share with us?  i've not seen it in any of their documentation on Zestimates.   I have heard a number of unsubstantiated rumors - so please cite your sources so we can all learn and grow.

  • March 10 2011
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Garydean,

Zestimates - by default - cannot be right because they are based on Tax Assessments.

The sole purpose of the Tax Assessments is to meet County BUDGET, not to establish a market value of the property. 

The county tax assessor rarely checks the EXTERIOR of the properties, much less the INTERIOR of the homes. If you take two neighboring homes on the same street: one of those homes has the most expensive upgrades and the other one was flooded frequetly because of faulty plumbing and is moldy ..... it makes NO difference to the tax assessor.  Partly because tax assessments must be "fair" and therefore must tax everyone the same tax rate per square foot AND because tax assessments do NOT take into account interior improvements :-) 
  • March 10 2011
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You will notice that there is a range next to the Zestimate.  My home has a range of $112,000!  

If you want a more accurate number contact a local Realtor.  Most will give you a free estimate which will be more accurate than any Guestimate or Zestimate.
  • March 10 2011
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  • March 10 2011
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Profile picture for SeattleHome.com
This baffles all of us.  It's a mathematical formula comparing tax assessments,  tax data, past sales, and comparable sales.  Many times, it's flat out wrong.
  • March 10 2011
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