Is Your Home Really Worth What Zillow* Says It Is?
*Zillow or any other company with an Automatic Valuation Model, that is!
There are many Automatic Valuation Models available on the internet, designed to give instant valuations of property values. In most cases, there is a big difference between the estimate provided on line and the market value—what a buyer would be willing to pay for a property at any given point in time. These estimates can be high or low. Sometimes they are off by a lot. Especially in San Francisco.
Why is that?
The models typically determine a valuation based on nearby homes with the same number of bedrooms and bathrooms of similar size (square feet), and use other factors to adjust their estimates.
There are many factors that impact the price of homes in San Francisco, including:
Does the property have views? Are they unobstructed? Water views? City Views? Panoramic views?
Have the kitchen and bathrooms been renovated? How recently? What is the quality of the finishes?
Have the windows been replaced? The roof? The furnace? Other systems?
How much work does the Structural Pest report indicate needs to be done?
Has the house had seismic upgrades? How extensive?
What is the size of the bedrooms?
Are there gleaming wood floors?
Is the home architecturally interesting?
Proximity to transportation (MUNI, BART, corporate shuttles) and highway access
PLUS: Was the house properly prepared and presented to the market? Painted, staged, all repairs completed…Was there a lot of competition?
Automatic Valuation Models are useful tools, but in a city like San Francisco, where we have interesting and diverse housing styles and homes that have been upgraded and improved at different times, the models are less accurate than they are in other communities where the housing is more similar and values don’t vary widely. Sometimes they offer values that are too low. Sometimes they provide values that are significantly higher than the price a buyer would willingly pay for a property.
Here is a snapshot of recent home sales in Noe Valley and the comparison of two AVM’s to the actual sales price (from the Zephyr website). In this example, Zillow is more accurate than appraisal.com.
The best way to understand the value of your home, given current market conditions, is to consult with an experienced real estate agent who can provide their expert opinion.
While some homeowners want to know the value of their homes to sell and take advantage of this hot sellers market. Many others are simply curious, or perhaps want to consider a renovation of their property.
Are you curious? Is your house worth more or less than the estimates say it is? I’m happy to provide analysis and my expert opinion of value for you.
Give me a call at 415-608-8461, or email me at firstname.lastname@example.org and I'm happy to help you understand the true value of your home in todays market and answer any other real estate question you may have.