LOL…..I got one of the biggest laughs ever out of this!
I have been working with a super cool family wanting to buy in a school district where there aren’t too many choices. A house comes on the market, and since I suggested we look at everything in this school district, they wanted to see it.
I look at the house online and realize it looked familiar. I hit the history button and saw that it sold last year and an agent I know was the listing agent. It sold for $199k and the seller paid over $6k in that buyer’s closing costs….meaning the “Net” sale price was more like $193k.
The current listing price is $234k. Nothing has been done to it. The market has improved, but not that much. I tell my client that the house is grossly overpriced. This is where my story is leading……she says Zillow has the value at $287k!!!!!!!
So, we have a house that might be worth $200k with an asking price of $234k and a Zestimate of $287k.
How did that happen? The Zestimate I mean. We know how the house got so overpriced. The seller is unrealistic. Zillow has some computer program that looks at recent sales. That is good. Their program though, doesn’t go inside the house, know the condition of the subject house or the comparable sales, know why the same house in one neighborhood might be more or less than one in a neighborhood just down the road.
What had to have happened to get this Zestimate so high is that Zillow’s program looked at other similar sized houses within the same zip code or within a certain radius. There are houses with this square footage close to this house that are worth that much, but NONE in this neighborhood. In fact, when this house sold last year for $199k, that is the highest price ever paid in that neighborhood.
The problem with Zestimates is that it can mislead the public. If you didn’t have an agent that knows the local market and neighborhoods, it might be easy to think this house was a bargain at $234k, when in fact it is still $30,000+ overpriced.
My advice? Do like my people have done…..use Zillow for research and fun but find an agent that knows the local market and who won’t let you pay too much for your next house!