The Sellsius blog recently ran an article talking about Zillow’s home valuations (”zestimates”) and how there are so many factors to include in a true home valuation or appraisal beyond just the past sales data from a neighborhood. They go on to mention a ton of factors that they coined “unzillowables” that just cannot be determined without actually visiting and knowing the neighborhood.
I agree with them on this, that a true valuation of a home cannot and should not be based JUST on hard data. However, what we are seeing is that there was a wide chasm of information that was not available to your “ordinary consumer” in the past, this is what has made this information so popular.
It tends to make real estate professionals upset, because now their customers are coming to them with some knowledge in their pocket. They are no longer just showing up with the desire to buy a house and no information. What we’re beginning to see is the education of the general home owner.
These home valuations are not all that they need, but it’s a good start to getting them in the right ballpark. Even if they just go off of the comparable property sales in the neighborhood, then go drive around and talk to some people in it, they’ll be MUCH further ahead than they were just 1 short year ago.
So, electronic home valuations (appraisals) are important. Just continue to educate people in helping them understand that it’s just part of the picture, the other parts will need the help of real estate professionals and good old fashioned foot work.
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3 users responded in this post
Thanks for the reference and link. We ran a few polls on zillow (viewable on our blog tab) and found that most people do get it. Most realize a professional is a necessary component to interpret data & tweak it to adjust for market conditions and other unzillowables. Zillow’s recent changes allowing for owner correction & addition is proof that public data alone is insufficient.
not to different then http://www.KBB.com Consumers can see car prices but it still comes down to what a buyer is willing to pay for and a seller is willing to sell for. period.
the house is product just like anything.
One of the things that I see happen, a lot, is people get trapped in the \”what if\” mode – especially when looking at investment real estate. They\’re not sure how to succeed at commercial real estate.
For starters, it makes sense to gather as much information as you can and analyze this information before doing anything – no question about that. As a matter of fact there are many people that DO NOT do enough of this.
However, after some have the required information to make a decision – they still pull the \”what if\” card – to their detriment.
What if the ecomony goes to hell?
What if the tenant trashes the place?
What if interest rates go up?
What if the owner is lying about…..?
Etc.
You have got to have the energy to get beyond these kinds of what ifs. If you do not and, Yes, stick you neck out there, you will look back on what you did not do with more regret that what you probably did do.
Especially when it comes to investment real estate.
If I had a dollar for everytime I heard \”Should have bought that property\” I would be Bill Gates neighbor on the Forbes 400 list.
Don\’t get too analytical. Too anal. This will hold your wealth back almost more than anything else.
Best.
Darin Garman, CCIM
Apartment And Investment Property Specialist
P.S. If you have not taken advantage of my special limited time 2 month complimentary \”test drive\” of the Commercial Investment Property Owners Association, here is another opportunity to see what you have been missing…
http://www.garmanupdate.com