This is a Zillow post. Actually it’s an AVM post. It examines the contest between market value based on data alone versus data PLUS sensory evaluation.
The new buzz term is “close enough”. (we’re still pushing “unzillowable” because we believe these keep zillow from getting closer) Seems fair. After all, no one’s perfect. You can (almost) blindly get behind the idea, even support it, for one of the major investments in your life. We’d agree that perfection is an illusion in valuing property and close enough is fine so long as it’s “good enough”. And by good enough, we mean “closer” than something else. Is the Zestimate the Bestimate?.
So the question becomes simply: What get’s you closer in valuing real estate? We like the term “real estate” over home because many homes have land included (and land harbors unzillowables). Also, the word “home” means more than “house” and implies the intangible “personality”, another unzillowable. The answer we think is also simple: data (as accurate, fresh & complete as you can get your little hands on) plus sensory evaluation, preferably by an experienced expert, such as a local real estate agent or appraiser. The key words are evaluation, experienced & expert. Our Zillow poll results support this answer.
Data tells you what other real estate sold for. A sensory evaluation tells you whether your real estate, given the “local market condition” (wow, another unzillowable), is likely to sell, in a reasonable amount of time, for more or less than the data indicates.
There are 6 things an AVM (including zillow) cannot do but which impact value are:
- See
- Hear
- Smell
- Taste (this might be a stretch, but some air can be tasted)
- Touch
- Interpret
But lest this post be spun to mean that zillow is the enemy, let us be clear. It is not. But it certainly is not the savior. And let’s never discount expertise and experience just because we can get a “number”. Knowing a value, regardless how you arrived at it, will not sell your home. Negotiation, people skills, persuasion, appeal to economic logic (present or future) or happiness, sells homes. We might argue that homes are not sold but are, in fact, BOUGHT.
.One caveat: The flip side of this buzz term coin is the connotation that “close enough” is something you hear when the person doing the job thinks enough has been done to satisy themselves and should, therefore, satisfy you. It’s like when I asked my son to paint the house and he missed a few spots and the coverage was not uniform. I told him to go back over it. You can guess what he told me” “Dad, it’s close enough.”
In the news: Wall Street Journal Online, July 14, 2006
The Pros and Cons to Calculating Your Home’s Value Online (by Jane Hodges)
Technorati Tags: Zillow, zestimate, unzillowable, home valuation, avm, sellsius
