How your home is valued and priced
To start out never take the Zestimate of your home that seriously. It would be fantastic if a real estate broker and agent’s job was that easy. It isn’t. There are so many variables that go into figuring out what your home is worth. Now if you live in a cookie cutter neighborhood where all the lots and homes are basically the same, there are only 5 models in a neighborhood of 500 or more homes and they all are pretty much the same, then maybe the Zestimate might be close. But if you live in a house in a unique area like the Denver Foothills then your Zestimate could be way off and misleading. There is a reason why a bank sends out an appraiser to look at your property before giving you your mortgage.
You should be concerned if you are buying a home or if you are selling your home. It is important to understand that finding the value of your home should be done by a professional. You should have an agent or broker come out to look at your home, walk through then find comparable homes that are similar to your home. That is truly the only way to find the correct value of your home. It isn’t as easy as calculating the square footage and going from there. That is a good start but it is much more detailed than that.
There are a ton of things that adjust your value up and down. Just a few of the basics are the types of fixtures in your home, Your lot, how much usable land you have, the condition of your exterior, the layout of your home, The age of the bathrooms, your flooring, garage, how much of your basement is finished and even how hot the market in your neighborhood is. These are just a few of the basic things that determine the value of your home. There are a hundred more and most of them are not know by an algorithm from a website based in Seattle, Washington. I understand I am being harsh on these big websites that claim they can determine the value of a property they have never seen, that’s because I am. The worst thing to ever happen to real estate is websites that sell leads to real estate agents. They do not update their listings to sold or active because it is better for the search engines and better for them because you click on that home and they sell that to Realtors and agents even though there is no chance you can buy because the new owners moved in 5 months ago but it is still a lead they can sell. It is bait and switch at a $500,000 value. As far as the algorithm giving you false hope on your home value or a buyer the idea you are overpriced is almost criminal. It could give you unrealistic hope and you might find a real estate agent that might “buy” your listing and take it knowing very well it is overpriced. A buyer might see the value on one of those websites lower than what you have it listed for and pass it up because they think it is overpriced.
Getting back on track, only a broker and appraiser can give you the true value of your home. We do this stuff everyday. We know how to price your home fairly and get traffic through without giving it away. You should always trust your broker over an algorithm. We know the complexities and unique features of your home that might bring the value up or down.