Recently a client of mine posed a very good question and I wanted to share it and my response to it with you.

"...why is there such a big discrepancy between the figures you gave me and Zillow's website? I thought that was where the banks got their info."

Home Finder Search Engines usually take their information from 6 to 9 months back and average out the sales from then and the current sales. Since the property value is going down, it shows inflated prices because homes sold for more 6 to 9 months ago. Also if you read the fine print on such sites it will tell you that there is also a range. You will see the lowest to highest prices, but again this is on older information.

The banks use this same information but they use the most recent information only. They compare what the sales are that are similar in administers (ie. square feet, lot size, up grades, etc.), and the most recent sales. (They send an appraiser out to physically look at the property and the properties that have sold to determine the price they are willing to value the home at.) They will use the sales that are in the last 2 to 3 months and will not use the ones that are from 6 months ago. Because of all of the problems with the inflated prices of the past, the banks are more cautious than before. Also they take into consideration if the prices are going down. So now when you are looking at what the house will sell for, you have to look at the pending homes because that is what they buyer is telling you he is willing to pay for the home. Just as when houses were going up you looked at the pending homes to see if the houses that are in escrow (which is what pending means) are going up, down or staying the same.

If you wait too long, sometimes the bank will re-evaluate the appraised price and tell you it has gone down in value because of the newer sales. The value of a home is only worth what a buyer is wiling to pay for the home, not what you need, now what you want , not what I say, not what another Realtor says, nor what Zillow says. It is only worth what a buyer is willing to pay. Whether the market is going up, going down or staying the same that is the truth. So if you have someone who markets your home well, get's it to all of the buyers at close to the right price, you will get an offer and it will sell. If it is not priced right, it means nothing because the buyers who look at it might buy it, but they won't pay what you are asking.