Why I Don’t Like Home Valuation Tools

If you’ve been following the market, then you know how misleading list prices can be. A home might list for $1.2M and sell for $1.8M. It makes it difficult for buyers to know what homes they can afford. It is really frustrating, and can lead to buyer burnout.

Do you rely on the Redfin estimates or Zillow “Zestimate”? It might be an unpopular opinion, but I’m not a fan. Here’s why I don’t rely on automated home valuation tools.

• Automated home valuation tools are based on information from public tax records, which are often inaccurate. It’s not uncommon for the square footage figures to be way off, or even for the bedroom and bathroom count to be wrong. 

• There are so many qualitative factors that impact the value. For example, is it nicely remodeled or outdated, is the layout practical or awkward, does it have functional outdoor space, views, and what’s the parking situation? You can’t just apply a generic price per square foot calculation unless the homes are all cookie-cutter. 

• It doesn’t take into account pending transactions. The automated models are based on comparable sales, but they can’t factor in any actively pending transactions. When I do the comps, I call listing agents who have similar listings that are in contract in order to get a real-time look at the market.

Now more than ever, buyers and sellers need an experienced, connected, and digitally savvy agent in their corner. Analyzing local comps with a fine tooth comb has never been more critical — and neither has the art of negotiation and crafting a compelling offer.

Whether you’re buying or selling in Granite Bay or Loomis, I’ll make sure you have a competitive edge.