Do you want to gauge your home value in Michigan? You’ve probably thought about using the popular Zillow website. But, truth be told, the Zillow “Zestimate” is not a reliable tool. It often generates lower or higher value than what your actual market price is. You may earn less than what you should, or you may scare buyers away with a high price tag.
Why You should not Use Zillow to Estimate Home Value in Michigan
Zillow is a top-notch brand in the real estate market. It is excellent for connecting buyers and sellers since it features listings nationwide. That is how Zillow makes the selling and buying processes easier for many people.
However, Zillow and its Zestimate tool isn’t a good choice for an in-depth home valuation. Here’s why:
1. Zillow only Uses Available Data.
Zestimate can only use available data, like tax records and previous listings, for estimating home value. But it can’t calculate other essential factors when gauging home value in Michigan, like recent updates, neighborhood changes or land changes. It also can’t assess the damages that could bring down your home value.
2. Zestimate Leverages on Assessed Property Value
Zestimate also uses assessed property value as a big chunk of its home valuation process. However, assessed property value is for gauging the property tax for each home, which doesn’t necessarily determine it’s market value.
In many cases, assessed value has a significant difference from market value. The assessed value can even go $100,000 higher or lower than the market value of a property. That means using such a factor for estimating a sale price brings largely inaccurate results.
3. Zestimate is Excellent only for Cookie-Cutter Homes
Zillow also uses comparable sales for home valuation, which is the process of estimating a home’s value by comparing it with other similar properties in the neighborhood. It’s what all real estate professionals do, but if the houses in your neighborhood have varying sizes, ages, and features, this task can become too tedious for an automated system.
If you live in a neighborhood of extremely similar houses and the Zestimate seems accurate, make sure there are no recent updates you’ve done or damages that are being left out of the valuation. Always double check the value of your home with a human appraiser.
4. Zillow Reminds about Zestimate Inaccuracies
Here’s the thing: even Zillow admits the inaccuracies of its home value estimating tool. The company tells users that Zestimate doesn’t use the same factors that professional real estate agents use. The tool doesn’t use intensive comparative market analysis. Instead, it only gathers public data from counties for coming up with Zillow value.
Moreover, Zillow tells users about the 5% median error of Zestimate. That sounds small, but it tells you that the tool is only correct for about 50% of all home value it generates.
5. Zillow Brandname Overshadows Reputable Real Estate Agents
Zillow is a famous brand in the real estate industry. It is all over the television and the internet, and many people trust the company as well. Now, imagine a home seller asking, “How can Zillow be wrong with the home value it generates?”
Such a simple question implies that Zillow is a brand that overshadows real estate experts. Many sellers prefer to believe in Zillow value than the home value that real estate agents produce. That is regardless of the latter having an intensive basis from market and property analysis.
As a result, some sellers stumble on wrong price tag pitfalls when putting their properties on the market.
Do you see? Zillow is not a good choice for home valuation. That is despite it being a reliable and excellent platform for other real estate purposes.
However, if you shouldn’t use Zillow, then how can you estimate home value in Michigan?
Essential Tips for Estimating Home Value in Michigan
Having an accurate home valuation or home value estimation is important before selling a house. It steers you away from low-price tags that give you lesser returns. Accurate value estimations also keep you from putting a high price tag that scares buyers away. The idea is to determine the best value that gives you the best ROI.
However, as discussed earlier, Zillow Zestimate is not a reliable tool for home valuation. Thus you should know the best steps to come up with the best price tag before selling. Keep these points in mind:
1. Get a Comparative Market Analysis from a Realtor
Comparative market analysis (CMA) is a common method that real estate experts use for home valuation. In a nutshell, it is about gathering data from similar properties in a given area and calculating it to come up with accurate results.
Here’s a rundown of how experts generate CMA reports:
- First, they gather all essential information from your home. That includes size, livable space, age, style, condition, features, landscaping, and recent improvements, among other factors.
- Next, experts search for five to six properties they can compare your home. Ideally, they should be one mile from your property and be sold within the last year. They should also be similar or identical to the layout and features of your home.
- Then the value of your house is adjusted depending on the differences between it and the comps. Your realtor will assign a certain value for each point of difference between the properties to use for calculating the final price.
- Lastly, they will calculate the final value of your home. First, they will determine the square footage value of each comp by dividing the sale price and square footage. Next, all square footage value is divided by the number of comps. Then it is multiplied by the square footage of your property to get your home value.
2. Get a Professional Home Appraisal
These experts use other industry standard methods to come to similar or identical home valution conclusions. Here is how a home appraisor evaluates a property:
Yes, professional appraisers also use comps for home valuation. However, they weigh more factors. Aside from property value, size, features, and specifications, they consider sales and depreciation as well.
They also gauge market factors when appraising a property. After all, similar homes in different locations can have significantly different price tags. For example, a home similar to your property can demand higher value when sitting on a waterfront area.
Of course, they take your property into consideration, too. That includes its size, features, and specifications. However, they also consider recent home improvements and the quality of the land plot where your home stands.
Avoid Zestimate and Get Accurate Home Value in Michigan today!
You want the best value when you sell a house. That’s why you should get the best and most accurate home valuation from correct sources. Avoid using Zillow for such purposes, and talk with a reliable real estate expert for your correct home value in Michigan today!