How to get off the roller coaster of on-line price estimates.
The algorithm is driving him nuts!
Last August my client told me that the on-line estimate for his College Park house plummeted from $680,000 to $642,000. Then, just last month, he lamented that the on-line estimates were diverging wildly from $640,500 to $700,514.
He is frustrated and worried because he might take a job on the West Coast and may need to sell his house soon.
He wrote me..."if you can't trust algorithms, what can you trust?"
I told him that I recommend trusting a human...a realtor with in-depth, local knowledge who pays attention to the market daily and tours most of the local housing stock.
Someone like me.
While on-line automatic estimates can somewhat gauge the value of your house based on recent sales, they don't do well at pricing based on the condition of the house. One of the reasons that the on-line estimate for his house plummeted in August was that a large house up the street from him with many bedrooms and a two car garage sold for a strangely low price.
Why did it sell for such a low price? It was in bad condition. I knew that because I had toured the house and smelled the wet basement while stepping on the crumbling floor tiles.
But the algorithm didn't know this, it perceived that there was a change in the market direction and lowered the value of his house.
I have had experience with strange price estimates before. When I met with the sellers of 3803 31st Street in Mt. Rainier in April of this year, the on-line estimates ranged between $330,000 and $382,000. By late June the house was under contract for $404,000 after 6 days on the market. That's a big difference!
Even more confusing were the online estimates in April for 6910 Pineway in University Park. One prominent real estate aggregation site estimated the house's value as $872,000 while another one estimated $371,000. By May the house was under contract for $1,100,000 after 8 days on the market.
What gives with the $371,000 estimate!? That is only 33% of the actual $1,100,000 sales price of the house.
My best guess is that the algorithm did not discern that the house was actually on two different lots and based the estimate on the part of the lot that did not have the house on it. I knew a lot more about the house than the tax records used in the on-line estimate and was able to provide my clients with a much higher suggestion for the offer price of the house.
Even the real estate aggregation sites know that they can't accurately predict the price of your house. Just yesterday, Zillow admitted after closing its unprofitable home-buying division that "the company realized that it’s not in a position to accurately predict where home prices will be in six months 'within a narrow margin of error.”
If they can't do this for themselves, then how can they do it for you?
If you are ready to get off the on-line estimate roller coaster, contact me today at tbeauchard@gmail.com or 240-413-4141. After discussing the key features of your house and the timing for your sale, I will give you a detailed price estimate based on recent sales and my in-depth knowledge of the Route One real estate market.
You will feel better after we talk, person to person about your house. I guarantee!
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Who am I and how can I help you reduce frustration and worry?
I'm Tamara Beauchard
As a top-performing realtor with Re/Max Professionals, I handled nearly $16 million in real estate transactions this past year. I stay on top of the market to ensure that you are confident about the price and the process from our first meeting to the settlement table.
You have an architect on your side! My experience in the design and construction industry means that we can talk about renovations and improvements that will both beautify your home and improve it's resale value.
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