Can you really determine the value of real estate with Zillow? Yes.
So you have your buyer or seller right in the crosshairs. They’ve let you know that there is no one else in the world they want to do their next real estate deal with. You’ve explained how much of a compromise it was even getting to the price you have on the table. Your prospective buyer then emails in the middle of the night “Hey what’s the ARV?” or “So what are the houses going for in that area?” Let’s get you to a PRACTICAL solution to this problem that won’t have you kicking yourself in the morning. Whether you’re on the sellers or buyers end of the bargain you need to have a decent idea of how much the prices are in any particular area. I’ve put on my real estate superhero uniform today to stop you from making the same mistakes I did.
Determine the value of real estate, how?
A lot of real estate professionals, mostly wholesalers and buyers, are turned off the moment a seller (or another wholesaler) starts talking about whatever Zillow says their home is worth. Why? Simply put, most of the time whomever is talking about Zillow just looked at one number: the Zestimate.
I’ve used Zillow for years in helping me determine the value of real estate… but I’ve never once mentioned “what Zillow says” something is worth. Zillow should be your source for data, not your brain.
SEARCH and you shall find…
Now that we agreed to never look at a Zestimate again, we can become instant experts using the Zillow platform. First, search for your subject property. In our case lets say its 7859 Birmingham Ave, Parkville, MD 21234, a randomly selected property from a map. Search for this property in Zillow. Press ‘enter.’
FILTER through the Zillow Amazon Jungle
Results should appear on the map to the left. You’ll probably be faced with a ton of listings. For Sale, Potential Listings, For Rent and Recently Sold properties will all appear. Select only Recently Sold properties. We are getting warmer. Of those properties, carefully identify which properties are most similar to your subject keeping in mind how many bedrooms & bathrooms your subject and its comparable have, square footage, style, basement/no basement, recent updates, etc, etc. If you’re determining ARV, be sure to match up your property to something comparable so that it will resemble yours post renovation.
Just one last thing
Did you know a decent portion of the data that is stored in your local MLS system is purchased by data warehouses like Zillow? I guarantee if you use the system the way I stated above, you’ll get what you need. After all, coming up with accurate comps is all understanding the property and the market. You can’t understand either of those two things if you let Zillow calculate a Zestimate based on an arbitrary equation. Use data, not algorithms.
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