Automated Valuation Models (AVM) like Zestimate are engaging but should be used for entertainment purposes only. They are essentially the whoopee cushions of real estate.
How much are you losing with automated valuation models? This is one of my listings that closed yesterday.
1 and 2 - what Zillow said this property was worth at the time I listed it in September (July is the closest month I could get to on the graph without the app snapping to today’s date but if you look at the line graph, Zillow is showing values had peaked in the neighborhood prior to the date I selected).
3 - The Zestimate on Oct 23 when I did the screen grab. The Zestimate is way up due to my listing at $340,000 (ironic). Property values in this neighborhood did not increase $20,000 in two months. In fact, if we go by Zillow’s graph, they actually decreased!
4 - What I listed the property at, what it appraised for and what it actually sold for.
This a great neighborhood with a decent inventory including several model matches. But Zillow has never been inside this property and algorithms can’t evaluate and compare decor or quality of improvements that have direct affect on value.
Had my clients gone off of this, they would have left $25,000 in equity on the table. We put together a professional marketing plan and received multiple offers our first day on the market.
Everyone’s situation is different. There are people who can benefit from iBuyers that use AVM’s and need to get out quickly or who are willing to pay the cost of convenience. For clients who treat their home as an investment, there is a tangible value to working with a real estate professional focused on their client’s goals.