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What is Your Home Really Worth

What is your Home Worth? Don’t ask the NET!  

CST Pricing Model was 97% accurate in 2020, while online pricing was accurate less than 9% of the time. 

 

Today people flock to the web to price everything from TVs to cars, but that does not work in real estate. 

We price hundreds of homes for sellers every year and we always show what the websites say the home is worth, because they are usually off by at least $100,000. Inaccurate Zestimates leads sellers and computer Realtors to over price their homes and cost them 3 things that are in limited supply: time, energy and money. The money alone can be in the tens of thousands of dollars.

As proof it has infested the institutional decision-making process for sellers and Realtors, in November 2020, one of the hottest seller’s markets in 16 years, 47% of the homes over $1M in Vienna withdrew unsold, while Realtors who still authenticate their data, like our team (CST model), produced a 97% success rate. 

Here are 11 reasons why real estate pricing engines, and the Realtors that use them, are unreliable:

  1. Homes are unique and have too many variables: Size, age, style, assessment, lot characteristics, schools, condition, upgrades, curb appeal and traffic patterns
  2. Real Estate valuation is based on comparables. Engines do not select the proper comparables making it “Garbage in, Garbage out”
    1. Comps must be similar age, size, school district, style, price range and condition
    2. Online engines violate most of these basic rules
  3. Engines ignore buyer pools 
    1. If they recommend $808,000, they miss 80% of their buyer pool, which are searching under $800,000
    2. Buyers always pay more when they find the home they love.
    3. Multiple contracts produce highest pricing and lowest contingencies
  4. Engines do not take market conditions into account
    1. Seller/buyer’s markets push values up or hold values down
    2. The % of homes under contract is a strong indicator of market conditions. 
    3. What prices have been tested and withdrawn 
  5. Engines use total sq. ft., not sq ft above grade
    1. Above grade SF is valued at around $300 PSF
    2. Basement sq. ft. cost $35 PSF to improve 
    3. You cannot mix the two
  6. Engines do not compare the average % of assessment
    1. If the average home sells for 110% of assessment, that is a strong indicator in  establishing “Customary Value”
    2. County assessors are the second best “on the ground” evaluators.  Realtors should be #1 
  7. Engines do not adjust PPSF for size and age
    1. PPSF must be adjusted for size. The larger the sq. ft., the lower the PPSF is and visa verse.
    2. PPSF must be adjusted a % for every year older or younger
  8. Engines do not adjust comps for condition and upgrades
    1. By the time a home is 20 years old, the value can vary 20% based on the condition and upgrade
    2. The home and comps both need to be evaluated and compared
    3. Customary appliances, condition, exterior entertainment etc. needs to be established
    4. The quality of condition and upgrades needs to be applied to both the subject and comps 
  9. Engines can not do personal inspections
    1. Only a local qualified Realtor can evaluate what customary condition and upgrades 
    2. Inspection of the lot is critical
  10. Engines do not have lot premium/discounts
    1. Lots can have a premium for size, contour, nothing behind the home with a quiet environment
    2. Lots can have a discount if they are small, on a pipe stem, hilly, or have traffic and noise issues 
  11. Engines do not have school premium/discounts
    1. Depending on age of the children of the potential buyer, Elementary schools and high schools can have 3%-5% effect on pricing
    2. Greatschools.com ratings are where most sellers get their data on elementary.
    3. U.S. News and World Report is the best place for high school ratings and data

To find out what your home is REALLY worth, call Casey at 703-508-2535 or email casey@caseysamson.com.

 

 

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