Here’s what you need to know about computer-generated pricing and why you simply can’t beat having boots on the ground.
We’ll typically do three to six market valuations per week, helping people with pricing by looking at past sales and current listings. Our computer pulls up estimates from Zillow and a few other services on every single property we look at. Not only can we see what a particular property was listed and ultimately sold for, but it also shows us what Zillow estimated the value to be.
Zillow is a company well-equipped to handle very big data; if you take 10,000 houses and their computer crunches the numbers, their average price will be right on the money. However, their computer doesn’t know a specific house’s value accurately.
Zillow’s algorithm has no clue whether you have brand-new granite countertops, or if your feet stick to the carpet. This leads to a rather large variation—the estimate is 15% to 20% above or below market value.
In essence, computer-generated pricing, like the model made popular by Zillow, gives you a sort of dartboard pricing from which to work. It’s a start, but it’s simply not as accurate as a real estate agent who’s going through 50 to 60 properties a week and can truly understand the value of your property—updates, remodels, condition, etc.
If you have any questions about this or any other topic, please don’t hesitate to reach out. We’d love to hear from you.