Profile picture for chefnatty

The house we want to buy is listed at $239,000 but your zestimate says it is worth $219,000.

What kind of offer should we put on the house?
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January 08 2010 - Hampton
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Answers (21)

When you make your offer on this house, be sure to use COMPARABLE properties from the area.  Zillow is a wonderful computer tool that bases its numbers on averages. You will need to find out what like properties have sold for in the area.

Also, it is not a bad idea to include the phase "must appraise at or above sale price" in any offer you make. Good luck!
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January 19 2010
Buyer:

Zillow is a tremendous tool, but even they disclose that there is a margin for inaccuracies.  You need to use this as guideline, but not as a steadfast line in the sand numbers.  I would recommend sitting with your Realtor and determining your market value.  Ultimately, it is an offer and you can offer whatever you are comfortable.  The worst case scenario is the seller says no! Best
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January 19 2010

>>>and try to buy at 20% below market value. The fact is if you pay market value you will have lost money the moment you get the keys.<<<

jkonstant,

Many REO properties sell ABOVE the listed price - especially homes in a good condition and location.

Good luck writing those 20% below market value offers....... it depends on the property.

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January 19 2010
If you really want to protect yourself and your hard earned cash, submit an offer pending independent appraisal inspection. This is an easy, ethical way to protect yourself....................please feel free to email me directly with any additional questions [contact info removed by moderator] . I would be more than happy to walk you thru the steps. Zestimate is hit or miss, so trust a disinterested third party appraisal source.
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January 19 2010
Work as a buyer client with a reputable Real estate agency.  All Real estate markets are local in nature.  DO NOT TRUST ZESTIMATE!!  A real buyer agent will work WITH and FOR you....and will suggest the best starting place.
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January 19 2010
"You want to submit an offer as close to the fair market value as possible."

NO, no, no, no, no,..... That is terrible advice in a declining or unstable market. With all the intervention out there attempting to stabilze housing, we have no way of knowing what true market value is. I suggest doing as much research locally with all the resources available and try to buy at 20% below market value. The fact is if you pay market value you will have lost money the moment you get the keys.

Contrary to some of the comments above, the Zestimate can be spot on accurate. Truthfully there is no formula to determine a 100%% accurate value.
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January 19 2010
Profile picture for lsgordon02143
Um yeah.  I'll believe 'trust the realtor not the zestimate' when it comes from
someone who doesn't have a vested interest in the system.  To the OP:
depending on your location, the right offer is 5-10% below the zestimate,
expecting to eventually pay the zestimate.  If you're really panicked that
zillow might be wrong, go ahead and look at some of its competitors.

For a long time, real estate agents had a monopoly on market analysis
data, and used it as a sort of bludgeon to force consumers to ask for
their professional advice in the process.  Now that the data is (a) publicly
available at the click of a button and (b) beautifully arranged into
accessible websites with plenty of auxiliary information, you will notice
that agents are getting desperate to protect their turf.

Agents hate "low" zestimates primarily because it threatens their
professional status as the ones who set the prices, and secondarily
because it might lead to lower fees for them.

--LG
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January 19 2010
>>>Try not to listen to all these spamming realtors!  Give an offer just below the zestimate.  You can always go up, not down.<<<

This is true only IF the property is over-priced.

If the home is priced correctly - or intentionally underpriced for a quick sale, as is the case often with REOs - most likely there will be multiple offers, especially in the lower price ranges, and your "offer" would not be worth the paper it was written on. 

You want to submit an offer as close to the fair market value as possible.

Zestimate does not reflect fair market value. Zestimate often is misleading. 
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January 18 2010
Profile picture for lsgordon02143
Try not to listen to all these spamming realtors!  Give an offer just below the zestimate.  You can always go up, not down.

--LG
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January 17 2010
A zestimate is an opion and is based off of the accuracy of information gathered by your local county goverment. Zillow has a tab on the bottom of every page title "Zestimate Values and Accuracy". Click on that tab to find out the accuracy of their stated estimates within your local market area. For the best answer to your question, you need to talk to a Realtor who can analyze the market conditions and evalute the range of value for a particular home.
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January 15 2010

>>>Thought zestimates can be pretty close, always get second opinion of REAL person who familiar with your area.<<<

Lilia,
Zestimates are more often wrong than correct - there is no human person involved in the process, thus by default zestimates cannot be correct. Every home is unique and it needs to be priced individually.

You meant to say: zestimates occassionally happen to be close to the true fair market value. Zestimates should not be used as a first or second opinion.  
Be sure to contact an experienced real estate professional in your area - if you wish to have a second opinion, contact another experienced real estate professionals in your area. 

Zestimate is NO substitute for an appraisal or a CMA - often it can be very misleading and it can do more damage than good. Homes differ as to value even in the same vicinity: built the same year by the same builder.

However, Zillow deserves a medal for this discussion forum, which provides invaluable advice for free.

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January 15 2010
I would ask your LOCAL Realtor to provide you Free Market Analysis and their opinion to help you with pricing. Because sometimes in the same town could be 2 streets next to each other where price will vary for different reasons. Thought zestimates can be pretty close, always get second opinion of REAL person who familiar with your area.

Good Luck!
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January 15 2010
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Mr. Talas, Please take the pledge.
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January 12 2010
I can help you with obtaining a mortgage for your new home. I can go over all of your options with you and we can see what type of mortgage would best suit your needs. I do alot of work in VA and would love get you a pre-approval as well.
You can email me at Talas21@aol.com
Or call me at 516 526 2515
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January 12 2010
I can't stress enough that zestimates are very rarely true value!!
There have been times when they have been the zestimate is within a few thousand of actual value but it does not happen frequently in my area of northern Massachusetts.

Value changes daily in a market like this.
A good agent will be able to help you establish true value.
Best of luck!
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January 09 2010

>>>If you offer 239K, and the official appraisal comes in at 219K<<<

The appraiser should NOT go by the zestimate - if he/she does, they should NOT work as appraisers. Likewise, realtors do not price homes according to zestimate.

The point is it does NOT matter what the zestimate shows as "value." If the zestimate showed $149K, it would not matter, and if zestimate showed $425K, it aso would not matter.

The market value of the home is established by the market.

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January 09 2010

HI chefatty, great question, and you have gotten some good replies. Home values can vary greatly, even when the values come from good appraisers. Ten percent variance is not unheard of between appraisals, especially in this market. Although I did not know that Zillow has a 20% variance (which sounds awfully high to me), even professionally generated appraisals are "opinions" of value based on a myriad of information, and in this market, the key variables are square footage and recent comparable sales. Remember, Zillow values may or may not be accurate, and are cetainly not "official". An up to date CMA may be a better indicator, and certainly, a professional appraisal is best, and the only valuation method accepted by the lenders.

If you offer 239K, and the official appraisal comes in at 219K, the seller has the option of lowering the sales price, letting you out of the contract, or you may bring the difference to the closing table. Obviously, in this market, it makes little sense to overpay for a home. 

I hope these comments help, Jim 

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January 09 2010
Chefnatty,

Completely disregard zestimate in your offer - pretend it does NOT exist. 

Make your offer based SOLELY on the current market value of the home you want to purchase by comparing it with other recently sold homes in the area. Most likely your realtor have done a CMA already, and if it was not done, now is the time to do that.
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January 08 2010
Many Realtors will provide you with a FREE 'market analysis'.  This will give you a realistic, up to date, opinions of what the home is worth in this market. The agent will look up recently sold homes in the area...as well as homes that are currently listed, with and without offers in on them.  Homes that are listed, and under contract are a good comparison.  Comparable homes should be comparable in Size, Age, Bedrooms/Baths, neighborhood, condition.  Reasonable adjustments in price can be made for differences in any comparable area.

Good luck!! ; )
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January 08 2010
This happens quite often for several reasons more importantly the solution. Has your or any Real Estate professional done a comparative market analysis for the property they are trying to sell you?

This is what the Realtor gets paid to do, provide you with information to support making an educated decision. If you don't have  a Realtor my suggestion is to begin interviewing agents. Remember this cost you nothing as they are paid from the proceeds of the sale.

Lastly, remember Zillow is simply a resource for information and the decision you make are based on information which means your decision is only as good as the information you basing the decision on. Therefore, if the information is dated or inaccurate than perhaps researching another source such as a Realtor who is accessing actual recent sales would be a better option.
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January 08 2010
Zestimate has its tolerance is 20%, therefore do not rely on Zestimate so much, you may hire the experienced buyer agent, He/She will give to you better opinion for the home price.
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January 08 2010
 
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