Many years ago, I was one of those agents that immediately jumped on the bandwagon when it came to trying to fight off big firms like Zillow and similar platforms from taking over the real estate industry, because I was afraid that my clients might begin to see the value in a one-size-fits-all kind of shop. Luckily, for me, my clients are smarter than that and I don’t feel as if I have lost any business to those platforms as my clients see the value in the services I provide.
Until my husband and I decided to put our own home on the market in 2018 though, I hadn’t truly realized how much these platforms affected our entire economy, and we were in for a rude awakening; especially when we realized how much they affected our own household economy.
In April of 2018, when running the Comparative Market Analysis (also known as a “CMA”) for our own custom home, after some adjustments, comparable “sold” listings gave my home a value of $910k. Keep in mind that, with a custom home, there are never exact, and sometimes not even close comparables. That’s what “custom” means, right? Nobody else’s home in the world is just like yours. Additionally, we lived in a neighborhood with no HOA and we had some neighbors who cared less than we did about their property, but I had adjusted for that too. Furthermore, because I was the homeowner and potentially biased, I had several other agents run CMA’s for me who came up with similar values to mine, so when we listed our home in the MLS in April 2018 for $888k, I felt like that was a fair price. And, while we could be leaving some money on the table, I felt like it was more important for me to find the right buyer and thought the lower price may allow for multiple offers. In fact, the agents who toured our house that first week thought so as well; all of them telling me that they were sure we’d have multiple offers within days. No such luck.
A few months into our listing, one of the agents who had shown the house to his buyers left feedback saying that they thought I should check in to see what Zillow was showing for a value on my house as that “forced their buyers in another direction.” I had checked Zillow before we ever listed, noting that in February 2018, they gave it a value of $628k and in March of 2018, they raised it substantially to $938k. That’s a $310k difference in less than one month! That’s the value of another home entirely! Why would I even acknowledge any values they showed when they were so far off before I ever listed the house? After speaking with that agent whose buyers went elsewhere, I was surprised to find that, after the big jump in March, Zillow had brought the value all the way back down to $647k (a difference of $291k in just over 3 months). That’s when I started going back in Zillow history and keeping tabs on my “Zestimate,” as Zillow calls it.
When I went to their website, I found that they had their information incorrect in several fields. They showed our house with incorrect finished square footage, without a finished basement, missing a bedroom and a bathroom, and only having a 3-car garage vs. 4-car garage. They didn’t give any credit to the fact that we had updated the entire house in 2018 from when we built it 16 years prior, nor did they give any credit for the large lot size, the RV pad and hookups, the landscaping, waterfall, pond, fencing, etc. Thus, just as I had suspected back when I jumped on the bandwagon against this idea of robot-pricing many years ago, they were comparing my CUSTOM home to TRACT homes, never taking into account any of the upgrades, special features, or lot size. They were pricing my completely CUSTOM home as if it were built in a factory with all the same materials, square footage, bedrooms, baths, etc. when NOTHING about my house was even similar to what they showed as “Comparable Homes.” Sadly, between their misinformation, among that of other sites, the TRUE comparables were never even shown and the value of our home plummeted in what was considered a rising market. Everyone who had ever been in our home was flabbergasted at what we ended up selling it for… $171k UNDER list price at $717k!
While this type of pricing may work for mobile homes, townhomes, and condos that are all EXACTLY THE SAME (are there ever really homes that are EXACTLY the same?), you will see in the data below that, on a CUSTOM home, these types of platforms are sabotaging our market. Continuing to support these types of services will only reduce values in ALL markets. As a buyer, one might think this is a good thing, but if you ever want to sell your home, this type of robot/computer-based pricing will only hurt your bottom line.
|Month||Year||Zillow Zestimate||E-Property Watch||Collateral Analytics||Ownerly.com||Homes.com||Listed/Sold Price|
|Zillow Zestimate||E-Property Watch||Collateral Analytics||Ownerly.com||Homes.com||Sold Price|
|Had we trusted these computer-based websites, even after reducing the price substantially, we would have lost this much more:||($101,000)||($70,282)||($21,000)||$3,600||($191,000)|
|Value fluctuation during study:||$322,000||$141,282||$24,000||$79,300||$239,000|
|Largest value change in shortest period of time:||$310,000||$85,014||$7,000||$36,100||$239,000|
As you can imagine, I am a huge believer in the human touch in all aspects of our lives; not just real estate. In sharing this information, my hope is that you can actually SEE the value a REALTOR® brings to the table when purchasing and selling your home. Sure, does it sometimes seem like the commissions we receive are larger than the job itself? In some cases, they may be. For an agent who does their very best to get you top-dollar for your home and handles all of the back-end research, management, and negotiations that most people don’t have time for an don’t even know need to be done, it’s usually worth every penny for the peace of mind that it was all done properly without anything coming back to haunt you after closing, thus making the transaction a win-win for everyone involved. Should you need an agent who puts your needs first, please give me a call. If I’m not the expert you need, I’ll be happy to put you in touch with the right one!
Colorado Independent REALTOR®, Agent ID: II100024534 / Office ID:M2005
CMRS, SFR, TRC, MCP, SCLC, CNSA, Notary Public
Roni’s Real Estate Website: www.RoniLambrecht.com
“As you grow older, you will discover you have two hands; one for helping yourself, the other for helping others.” -Audrey Hepburn