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Real Estate

Charleston SC: The Trouble with "Zestimates" in Real Estate

     

Blog_The-trouble-with-zestimates-in-charleston-sc.jpgBy Terry Bell-Aby, Realtor, CNE, Luxury Simplified Real Estate

Zestimate.  It has “estimate” right in its name, and yet it can be very problematic for both buyers and sellers alike.  Sellers often sit down with me at a listing appointment and have unreasonable expectations for what they can realize in the sale of their home because the Zestimate is too high.  On the other hand, sellers are frustrated when the selling price located right above the Zestimate appears to be overpriced and hurts their cause.  Buyers are disappointed when they realize the home they just fell in love with online is not going to be purchased for the Zestimate price. Zillow has in fact, offered a prize to anyone who can rewrite their program to become more accurate. They have also been sued for conducting appraisals without a license.

There are several reasons this "one size fits all" pricing model is not always accurate. Sure, they have complicated algorithms that look at square footage, bedrooms and zip codes but there are too many other elements that cannot be factored into determining value. My home for example, is on Johns Island SC, not far from downtown Charleston, in a small neighborhood with 15 homes built in 2005-2006. Zillow will aggregate my home with the mobile homes nearby and a horse farm down the road to determine the value. Just because these homes are near each other does not mean they are comparable. Even if you can narrow down to similar homes, those say in a large subdivision, oftentimes there are tiered levels of construction in those subdivisions that can account for differences in quality and materials.

In Charleston, the "view" greatly affect the home’s value. The differences between marshfront, marshview, waterview, riverview, oceanview, and oceanfront are unique and sometimes subtle. Likewise, my Johns Island home faces the other homes that are similar in quality to mine, but five of the homes in our subdivision face across the street from the mobile homes. That type of view can also affect value.

Perhaps the most important reason that a Zestimate becomes an unreliable benchmark is when it comes to condition. Zillow cannot see inside your home to see your upgraded kitchen and beautiful tiled bath. Likewise, it cannot see into your neighbor’s house to see that baseboards are missing, door handles are broken, and windows have not been maintained. A home with worn finishes and lots of dated wallpaper is treated the same as a newer and more updated one. My neighbor’s property has beautiful, big Live Oaks and mine does not. Even a qualified appraiser might have trouble assessing the inherent value of the trees.

There are also many things only someone who knows the area and is informed about the community can bring to the table as well. Did that neighborhood experience flooding during the recent hurricane? Is there a new school being built nearby or, is there a change in zoning ahead from the local municipality? A good real estate agent stays up-to-date on local news and events. Additionally an experienced agent will know what questions to ask homeowners such as traffic patterns, proximity to local businesses and if high tide ever makes travel problematic.

Condition of the interior, exterior and neighborhood all influence value. As an experienced Realtor, I can also tell you that Zillow will not be able to determine if the home you just absolutely loved online smells horribly like cat urine in person!

Note: In order to receive an accurate market value estimate for your Charleston home, it's always best to consult an expert and not rely on Zillow's Zestimate, that may miss key contributing factors. If you live in the Charleston area and you are thinking of selling your home, find out what your home is really worth from a qualified, local real estate source - I will be delighted to provide you an estimate of what your home is worth.

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