Any real estate agent will tell you that an overpriced house won’t sell – especially not in the type of volatile housing market this state has experienced in the last few years.
Instead, the house will sit on the market for weeks, if not months, until the agent has that dreaded conversation with the homeowner about a possible price reduction. By that time, the house is considered a stale listing, losing out on those precious first few weeks of excitement and interest generated when a home first hits the market.
Realtors often say one of their biggest challenges is trying to get unrealistic home sellers to price their homes to reflect true market values, and not the inflated values common in Massachusetts just six or seven years ago. And now real estate professionals have to contend with a host of Web sites and other tools that have sprung up lately, vowing to give homeowners an “accurate picture” of what their home is worth, making a tough job even tougher.
In the past, home sellers and homebuyers heavily relied on real estate agents and professional appraisers when trying to determine a home’s value. Today, consumers are doing their own research online, before ever contacting a real estate professional for an opinion. That’s led to tense conversations between real estate agents and their clients about how to price a home, with homeowners insisting that their plain old ranch home with avocado-green appliances should sell for thousands of dollars more than it’s worth.
Foremost among the culprits is real estate Web site Zillow.com. Zillow touts its popular “Zestimates,” a tool unveiled about four years ago which calculates a property’s supposed valuation.
Zestimates have created headaches for real estate professionals and appraisers who say the site’s valuations aren’t 100 percent accurate and often overestimate property values. Last month, The Appraisal Journal published a study showing that 40 percent of homes sold in Arlington, Texas, were overvalued by Zillow by more than 10 percent compared to actual sales prices. Even Zillow itself acknowledges that its Zestimates are not appraisals and should be used only as a starting point in figuring out the value of a house.
But Zillow isn’t alone. These days, consumers have more than Zestimates at their disposal to try to figure out how to price their home. They don’t even have to sit in front of a computer to get property information. They can use software applications on their iPhones to get details on homes that are listed for sale, including price and size.
Consumers serious about selling or purchasing a home should recognize these tools for what they are – a jumping off point and a good way to get a ballpark estimate before involving a professional. Nothing more, nothing less.
A smart consumer needs to realize the truth – that when an appraiser or real estate agent walks into a home, takes into account special features, location and market conditions – they will inevitably come out with a better estimate of what a property is worth.
For most, purchasing or selling a home is one of the biggest financial commitments they’ll ever make. It makes no sense to use Zestimates and other technological tools as a basis for such critical decisions, rather than listening to the advice and guidance of seasoned professionals who’ve experienced the ups and downs of markets and who truly understand what’s happening in marketplace.
After all, a savvy consumer entangled in a messy lawsuit wouldn’t turn to a Web site for free legal advice. Why should a home seller or homebuyer trying to negotiate a complicated sales transaction be any different?
At the end of the day, it doesn’t even matter what a Zestimate, or any other tool, says a house is worth. Banks require professional appraisals to be completed before making a mortgage loan for good reason – so a homeowner sticking to an unrealistically high price will end up with no deal at all.





