Pricing Your Home to Sell (cont)

July 18, 2007

In the past few years, several web sites have been created that purport to give you the value of your home. One of the earliest of these sites was zillow.com.

Just by typing in your address and city and state, and clicking on the search button, a map and a "zestimated value" would appear on the computer screen. How cool is that?



Since zillow, a number of other sites have been launched. Some require the visitor to register. Others, like zillow, only ask for the property address, city and state. I checked out zillow and 2 other sites to see how they valued my home. The two other sites were realestateabc.com and cyberhomes.com. Their valuations differed by more than $50,000. I checked the comparable properties that they used and found that in many cases there were at least 3 years old and not really comparable.

The values are usually the result of the following methodology:

1) Gather, in electronic form, the property characteristics from tax rolls;

2) Write an algorithm that selects comparables and adjusts the sale prices;

3)Arrive at an estimated value.

Obviously, the algorithm has never seen any of the properties, nor the actual neighborhood. It is basically a mathematical calculation. Twenty some years ago, Lois Lauer Realty developed a mathematical program that used price per square foot to calculate value. It was fun to use and gave additional information to our analysis of comparable properties, but again, it did not factor in the uniqueness of a particular home.

Pricing a home to sell is always one of the largest challenges that face a homeowner and a real estate agent. In a cooling marketplace such as we are presently experiencing, it is crucial to achieving a sale.