Zestimate Reliability

by Jim the Realtor | Dec 18, 2022 | Jim's Take on the Market, Why You Should List With Jim, Zillow | 0 comments

If everyone is relying on the zestimates….are they any good?

It’s a scary thought that we’ve become dependant upon an algorithmic computation of home values run by a third party for profit. Good thing they got out of the home-buying business!

The zestimates have been more accurate lately, but it’s hard to track because they still adjust them once a home is listed for sale. When you get notified of a new listing, check their zestimate immediately because it takes them a few hours to fabricate a new zestimate.

Here are the zestimates that are dated before my last three listings hit the MLS:

This was run on August 11th. We listed on September 15th for $1,800,000, and closed for $1,750,000:

Here’s the zestimate of Oakridge, dated April 21st. It closed for $1,265,000 on November 18th. There is a big gap in the timeline, which means I may have gotten close to peak pricing in October:

This Carmel Valley zestimate was dated September 12th. It closed for $1,660,000 on December 2nd:

The Carmel Valley example is probably the most interesting because it’s a master-planned community of similar tract houses – their algorithm should be most accurate here. But they still modify their zestimate once a home hits the open market. They must expect homes to sell under the list price now:

At the bottom it says, ‘estimated value of this home based on local comparable homes’.  Instead, they should just use their ‘Estimated sales range of $1.48M – $1.63M’, and add this, “depending who your realtor is”.

Back-on-Market Discount

by Jim the Realtor | Nov 4, 2022 | Jim's Take on the Market, Why You Should List With Jim, Zillow | 2 comments

Our one-story listing in Aviara closed escrow today.

We had listed for an attractive $1,800,000 in mid-September, and had about 2,600 views on Zillow in the first five days (see above).  We received three offers, and accepted the highest at $2,100,000 cash.

Previously I told the story of how the home inspector’s lack of bedside manner put the buyer on edge. Their mold inspection didn’t detect anything in the air, but a swab behind a toilet did cause a positive result. We offered mold remediation and re-test to ensure the problem was corrected – the standard solution – but the buyer said she couldn’t handle the stress and cancelled escrow instead.

You never get the same buyer enthusiasm the second time around, so I knew going back on the open market in mid-October was going to be a challenge – especially now that my seller was getting used to the idea of a $2,100,000 sales price.

We completed the mold remediation so at least the problem was solved.  But I didn’t make any mention of it in the MLS or in other advertising because I wanted to control the message.  We went back on the market on Friday, October 14th, and I did the open house extravaganza on the 15th and 16th where I planned to discuss the mold remediation in person with the interested parties.

We only had about 1,580 views in the first five days – which is 40% lower than the original effort:

I had already contacted the previous bidders from the first round, and the second-place finisher who had offered $2,000,000 cash was still interested.  They weren’t willing to put another offer on the table until after the open houses were done, and when they did, it was a disappointing $1,650,000.

No one else made an offer.

We went back and forth, but the best they were willing to do was $1,750,000.

By then, it was Tuesday night and the first game of the Padres vs. Phillies playoffs.  Without any hope of another offer to rival the deal on the table, the next day the seller decided to take it, and stay on track to purchase the replacement home that we had in escrow, contingent upon this one selling.

Did the value drop $350,000 in a month?

You could say that, but it the double whammy of falling out of escrow/mold remediation didn’t help.  The original $2,100,000 offer was too optimistic to stick, and given that the eventual buyer had dropped from $2.0 to $1.75, their original offer probably wouldn’t have closed either.

An offer of $1,800,000 would have made it to the finish line, and maybe as high as $1,900,000.  Having the general negativity increasing about real estate market every day was bad enough, and then include the wicked combo of second try/mold/Padres playoff fever.  I’m glad we got as much as we did.