Today there’s a wealth of info available to home buyers and sellers that didn’t exist just a few years ago. Online home value estimator tools are a great example. While home value estimators are an excellent tool, they aren’t perfect. So what can you do if an estimator gets your home value wrong? Keep reading to learn.
How to Fix Your Zestimate:
Zillow’s Zestimate is the most “fixable” online home value estimator because it allows you to claim your home and to teach their computer more about your property. For example, you can input changes like:
- A recent remodel
- A bedroom addition
- Added square footage
- Added bathrooms
- A garage parking expansion
Once you make the change on Zillow, Zillow may modify the Zestimate to reflect the change. Keep in mind that this doesn’t mean your Zestimate will be completely accurate. It just means it will be more accurate than it was before.
How to Fix Your Redfin Home Value Estimate:
Unlike Zillow’s Zestimate, Redfin doesn’t allow homeowners to claim an address and to make changes that impact home value estimates. So what can you do if their estimate is wrong?
Redfin pulls data from county tax assessors via companies like CoreLogic and DataQuick. If your estimate is off, that may mean there’s an error in your property tax record. For example, if the assessor shows your home is 980 square feet when it’s really been remodeled to 1,750 square feet, your value estimate is going to be way off. If this happens, you’ll need to work with your county assessor’s office to update your home data. Once it’s fixed at a county level, it will automatically update on Redfin the next time they pull data to their site. Your home value estimate will reflect the correct data.
While Redfin is usually very accurate, we know first-hand that they aren’t always right. One of HomeBay’s co-founders lives in Hillsborough, California, a city that has had the highest rated school district in the state for five years running. However, his home is literally one property away from Burlingame, an area where home prices are lower. Redfin sees that homes three properties over are selling for less and gives those home values more weight than the benefit of being in the Hillsborough school district, even though the opposite should be true. So what can be done if a home value estimator simply doesn’t have it right?
Follow this simple three-step process:
Focus on Redfin’s Home Value Estimator:
Redfin’s home value estimator is the industry gold standard. We’ve found that it’s typically accurate within 2% in California. For those reasons, you should prioritize focusing on this estimate over Zillow’s Zestimate, which can be off by as much as 8%. If your tax data is right and your home value estimate still seems low, see step 2 below.
Beware of Seller Bias:
On average homeowners overestimate the value of their own home by 8%. Are you guilty of seller bias? It’s possible, and it could be creating a major discrepancy between your opinion of your home’s value and Redfin’s. But how do you determine if that’s the case?
Pull Neighborhood Comps:
If you’re confident Redfin is wrong, it’s time to find two or three recent sales of similar homes in your neighborhood that help you prove it. If you can come up with significant evidence that you can show to appraisers and buyers, you may be able to support a higher price point when you go to sell.
To do this effectively, you need to be able to name three specific addresses of similar homes that recently sold near you for a price that justifies your home value estimate. Real estate agents refer to this processing as “pulling the comps.” If you need help pulling comps on your California or Florida home, just let us know!
Being armed with the comps is very helpful. It can help you in discussions with buyers and appraisers. They say, “Hey, Redfin says your home is only worth $X.” You can say, “Yeah, and Redfin is just a computer that isn’t always right. Check out these three addresses that recently sold for more than what I’m asking for — and my house is nicer!”
If you’re preparing to sell your home, take these home value estimators seriously. Work with them where you can, and arm yourself to fight them if you have to.