When a client is looking to sell their property they now have a whole host of exciting new tools to help them. Technology has changed the real estate game for the better by providing both agents and sellers more information. As realty agents it is our job to help our clients understand these new technologies. Part of that responsibility is discovering how much a home or property is worth. In 2006 a company named Zillow created an online tool called Zestimates that aids home sellers in focusing in on a value. Six years later Redfin, Trulia, and the major banks began to follow suit.
These value estimators use public data, detailed user input, and complex algorithms to calculate the value of a home. According to Zillow, the values they produce are within ten percent of the final sale value. So while the data could be more accurate, it gives a good idea to the seller, and may make your job, as an agent, easier.
Redfin’s tool is less accurate than Zillow’s as it only allows users to pick homes similar to their own. This simplified process is great for sellers looking to get a general idea of what their home may be worth. Real estate agents should suggest Redfin for first time sellers.
The issue with these kinds of tools is twofold: one, they instill a false sense of confidence in the seller; and two, that confidence may lead to brash decision making that could hurt the client in the long run. As agents it our job to present these tools to clients, but to caution them on the results. Providing our customers with all the tools they need is necessary, but educating them on their use and drawbacks is even more important.
Working with these tools, agents and sellers can work together to sell a property quickly. The more informed each party is the better prepared everyone will be to make an educated decision.