What do you veterans think of zillow as a property value estimation tool? It is great for looking at comps, but do you find their estimate range and their “zestimate” to be generally fairly accurate?
I think that the general consensus is that web based services are often quite inaccurate. If you are going to be serious about the REI business, then you need to learn your market. I would suggest starting out by looking at 100 houses (inside and out) that are for sale in your target investment area. You should keep looking at houses until you can spend a few minutes looking at a property and KNOW its value!
Good Luck,
Mike
I have access to the MLS and when I compared the estimates I got from the MLS with the ones from Zillow a found huge differences. And in all cases Zillow was higher. So I don’t think it is accurate for my area.
And one other data point - when I checked my own property I found that Zillow flagged the transaction where I bought the house few years ago as a “suspicious” transaction - which means they didn’t feel it was an arms length transaction. Which it was. So I don’t think they are very accurate.
In my area, I’ve found that Zillow is actually lower than many of the homes that actually had an appraisal within the past year or so. You have to a “reality check” but you can use their site as a tool only. There’s no substitute for actual first hand knowledge. Perhaps you can a local appraiser to give you a preliminary figure before doing an actual full blown appraisal. It may cost you some money but if you can combine that with actual property inspections, the education you’ll recieve will save/make you money down the road. Good luck.
Before I pay for one I use 3-4 of the web-site based value estimators and take the average, then I search out the homes recently sold and cruise the area to devise my own opinion. Homegain, Cyberhomes a couple more and the property value reports to the left under Investor Resources.Herbster
Thanks for the responses. If not for the value estimators, at least it is useful for learning what homes sold for. It’s good to know how long ago the sellers purchased the property and for how much.
Thanks for the response Mike. I do have a question though. How would I know the value of properties in my areas considering that when I visit homes, the asking price will be all that I know and that is never a good indication of fair market value. So how do I get to the point that I know how much a home is worth? Should I get some of them appraised so that I can learn that? I just don’t see another way that I would get to be so good at knowing the properties’ true values.
How would I know the value of properties in my areas considering that when I visit homes, the asking price will be all that I know and that is never a good indication of fair market value. So how do I get to the point that I know how much a home is worth? Should I get some of them appraised so that I can learn that? I just don't see another way that I would get to be so good at knowing the properties' true values.
Appraisals are usually very expensive. Instead of getting the appraisal I would recommend asking a real estate agent. They can run comps from the MLS that will give you a good idea of value.
I agree with Mike that the best way to learn values in your target area is by visiting multiple properties. Over time you will get a sense of value and will be able to quickly identify if a property’s asking price is in the right ball park. When I was looking for my first investment property I checked a lot of properties. After my third or forth weekend looking I started to get a feel and I could tell if the price was appropriate or not.
Good luck!
I agree that appraisals can be very expensive. Using an agent is a good idea and first hand knowledge are excellent too. But when you’re talking about a rental property, a value of $100K is meaningless if the rents won’t cover that amount. IMO, the true value of the property is what the rental income will cover minus operating expenses.
I’d do an average like herbster said…use zillow, realquest.com, homegain, and Cyberhomes. Also, one good thing about zillow is that it does show you recent sales in the area. If you can find recent home sales (if there are any), I’d just do a generic comp myself…# of bedrooms, square feet, etc.
As far as determining value online…realquest.com has been most accurate in my experience.
Hope that helps.
I do have a question though. How would I know the value of properties in my areas considering that when I visit homes, the asking price will be all that I know and that is never a good indication of fair market value. So how do I get to the point that I know how much a home is worth? Should I get some of them appraised so that I can learn that? I just don't see another way that I would get to be so good at knowing the properties' true values.
You’ll learn the market value of properties because you’ll be talking to people as you look at those houses. You’ll hear what the property across the street just sold for. You’ll hear the story about the woman down the street that is having a nervous break down dealing with her tenant from hell. You’ll get more information than you can ever imagine. The key is to get out of the house and look at property. Talk to people. Real estate investing is not a home-based internet business. It’s a get-out-of-the house-and-meet-people business! A side benefit of looking at all those properties is that you’ll probably find a couple of deals just by talking to all these people (and the deals you find probably won’t even be the property that you’re looking at).
Good Luck,
Mike
Zillow is a Tool, and to me not the sharpest one.
One things I saw on Zilliow is that the owner of a house can go in and pump
up the value if they have done work to it or added to the house. I even did it.
Of course the Owner of a house most always thinks his or her house is worth
more than their neighbors house because of X Y Z.
Over the next 18 months in about 40% of the country you may see home values
in what used to be the “Hot Appreciation Areas” change on a monthly basis.
Then in 60% of the country values are about the same as they were and in some
markets they have appreciated in value a bit. House’s is a lot of the country are still
selling for a good price it is just taking a lot longer and will for the next 3 to 5 years in
my way of thinking.
I also take a look at Realtor.com to see what folks are asking for properties in the same
area as the one I may want to buy to get an idea of price ranges, since I do mostly out
of state investing myself.
Even the comps on Zillow are not accurate. I look at what they consider a comp and its 10 miles away and 1000 sq feet bigger, but yeah its a 3/2. Not good.
I do like it for checking out a neighborhood I don’t know. With the satellite pics they have you can see if there’s cars parked in back yards or nice lawns, and you can get some details about the property.
I agree. Get out, see whats for sale for what, then see what they sell for. You’ll know the market before long.
Appraisers wave their arms and yell a lot but ultimately what your house is worth is what every other house just like it in the same neighborhood has sold for in the last 6 months. That is true no matter what color the house is or how many flowers are in the yard. So in order to find out what a house is worth (I mean retail value) you need access to the actual sales prices of these houses.
Appraisers are able to put a stamp on that number and they charge $300 because of that stamp. All real estate agents have access to that number but real estate agents are notoriously ignorant to business and real estate, they can’t get you sold comps that you can use. That means you need a tool that allows you to do your own comps. I subscribe to a service that give me the sold comps in my town. If you can stand over a real estate agent’s shoulder and have them do what you tell them to do or find one of those rare agents that actually understands how real estate works and you can trust, that will also work. Agents will sometime leave out comps that are bad or use comps that are not really comparable.
What is this service you subscribe too?
As I have said before all real estate is local. I am in Houston. I use Real Data http://www.realdata.net
I put in the address it tells how much the subject house sold for and when and it allows you to pick which houses you use for comps.