Comparative Market Research…The right and wrong way.
We have all heard from one person or another who uses figures from sites that take recent sales and do some basic crunching of the numbers to produce figures that really make — little to no sense.
As their agent, I was mortified. I looked at all the homes that has sold since their escrow closed. And did my own thorough number crunching. To my relief, the data of homes that did sell showed nothing of a decline but actually stability. In my market analysis, I evaluated the cost per sq footage of homes sold, I took into account the condition of the home, as well as the exact location, and style of the home. I also evaluated the owners’ situation – sometimes an owner has to sell due to illness or a out of state move — both of which create additional pressure to sell quickly. Internet sites do not do this as they are mostly automated and primarily make their assessments based on square footage or bed and bath counts.
The numbers produced by the sites can often mislead clients in essence providing them with inaccurate data thus this can often be a real detriment to their decision making process. The analysis of a qualified real estate is absolutely critical. In investigating the disclaimer provided by one of the sites, I found the following explanation of the value figures they provide. “The…home valuation…is not an appraisal. It is a starting point in determining a home’s value…your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. Variations occur because of negotiating factors, closing costs, and timing of closing. We encourage buyers, sellers, and homeowners to supplement [our] information by doing other research such as: Getting a Comparative Market Analysis from a real estate agent.” – Zillow. They then go on to say that the median error rate for Los Angeles is plus or minus 9.8%
So while it might feel efficient to plug in an address and get a quick calculation from an internet resource, nothing is more real than a thorough analysis from your real estate expert. Use real estate agents to get real info.
Comments(4)