What is your home worth? Don’t ask the internet!
The accuracy of the online pricing engines (Realtor Property Resource, Realtor.com, Zillow, Homesnap and Redfin) are only accurate 9% of the time!
The Casey Samson Team Pricing Model, the Gold Standard of Home Valuation, has a success rate is 97%, compared to an industry standard of 55%.
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 96%+ success rate. Here are 11 reasons why real estate pricing engines, and the Realtors that use them, are unreliable:
Here are 11 reasons why real estate pricing engines, and the Realtors that use them, are unreliable:
- Homes are unique and have too many variables: Size, age, style, assessment, lot characteristics, schools, condition, upgrades, curb appeal and traffic patterns
- Real Estate valuation is based on comparables. Engines do not select the proper comparables making it “Garbage in, Garbage out”
- Comps must be similar age, size, school district, style, price range and condition
- Online engines violate most of these basic rules
- Engines ignore buyer pools
- If they recommend $808,000, they miss 80% of their buyer pool, which are searching under $800,000
- Buyers always pay more when they find the home they love.
- Multiple contracts produce highest pricing and lowest contingencies
- Engines do not take market conditions into account
- Seller/buyer’s markets push up or hold down values
- The % of homes under contract is a strong indicator of market conditions.
- What prices have been tested and withdrawn
- Engines use total sq. ft., not sq ft above grade
- Above grade SF is valued at around $300 PSF
- Basement sq. ft. cost $35 PSF to improve
- You cannot mix the two
- Engines do not compare the average % of assessment
- If the average home sells for 110% of assessment, that is a strong indicator in establishing “Customary Value”
- County assessors are the second best “on the ground” evaluators. Realtors should be #1
- Engines do not adjust PPSF for size and age
- PPSF must be adjusted for size. The larger the sq. ft., the lower the PPSF is and visa verse.
- PPSF must be adjusted a % for every year older or younger
- Engines do not adjust comps for condition and upgrades
- By the time a home is 20 years old, the value can vary 20% based on the condition and upgrade
- The home and comps both need to be evaluated and compared
- Customary appliances,condition, exterior entertainment etc. needs to be established
- The quality of condition and upgrades needs to be applied to both the subject and comps
- Engines can not do personal inspections
- Only a local qualified Realtor can evaluate what customary condition and upgrades
- Inspection of the lot is critical
- Engines do not have lot premium/discounts
- Lots can have a premium for size, contour, nothing behind the home with a quiet environment
- Lots can have a discount if they are small, on a pipe stem, hilly, or have traffic and noise issues
- Engines do not have school premium/discounts
Pricing is the key to success!
Call Casey at 703-508-2535, or email your address to [email protected], and by close of business, you will know what your home is really worth.