Tuesday’s Objective: Educating yourself about the subject property and the area around it.
There are 5 main resources to research when learning about a property in order to determine its value.
- Tax Assessor
Internet: An Internet Search is as easy as typing www.google.com and doing a Google search on the property. When you do the search, you will see the property and its map location on Google Maps. By clicking on the map, Google will open a large map showing you the property’s exact location with a Satellite View of the property which will allow you to zoom in with amazing clarity. There is a street view feature in Google Maps that lets you jump down to view the neighborhood on a street view level. With the street view you can pan 360 degrees and move up and down the neighborhood to get a look of not only the house, but the surrounding homes and community.
- Look around the neighborhood
- Check where the property is situated
- Is it close to amenities?
- Does it back to a major road?
- Is it in a cul-de-sac?
RPR (Realtors Property Resource): Search the address in Realtors Property Resource®. The search results will give you:
- A valuation estimate and a range that it could sell within
- Recent solds
- Tax, school, owner info
- Photos of the house
- Often times RPR values are close to market value
- RPR is one of the easiest to use most thorough resources that you have access to
- RPR® offers exclusive access to analytics and custom branded reporting tools that can be printed, emailed or texted from anywhere at any time.
MarketSoldier.com: This tool is tied directly to some MLS data and it updates daily. You can research:
- The county statistics
- Active, pending & sold units, absorption rate, avg price per price range, list to sold ratio, and the average days on market.
- The area statistics
- A more refined look at active, pending & sold units, absorption rate, avg price per price range, list to sold ratio, and the average days on market all specific to the MLS area where the property is located.
Zillow: It’s important to know a few things about Zillow because this is where the consumer is going.
- Much like RPR, Zillow has a listing for almost every home, whether the home is actually for sale or not.
- If the subject property is listed, that information came to Zillow either because the listing agent or owner input it directly – or through a feature called ListHub. Brokers choose to opt in or out of using List Hub for their firm’s listing inventory or may have a direct feed to Zillow through the MLS.
- Zillow shows their estimate or their “Zestimate” of a home’s value. Zillow is a bit secretive about how they create their Zestimate, but the only thing they have is information based on data collected from public tax records. It will include the number of bedrooms, baths, sq ft, lot size, year built, last sale date and price. Zillow makes market assumptions and either adds or subtracts value based on their perception of trends in market values which affects is Zestimates.
Zestimates – Zestimates will be presented as a specific value, but there also will be a range of value offered and what the change has been for that value in the past 30 days.
It’s good to understand Zillow because your clients are likely looking there. A great way to combat the information provided by Zillow is though Zillow’s own published accuracy ratings.
Zillow’s Accuracy: At the bottom of the main page of Zillow is a link that says “Zestimates.” By clicking on that link, you will see a “Data Coverage and Zestimate Accuracy” page for Zillow. Simply click on the States/Counties option below and search for your county or city.
Zillow gives themselves a rating of 1-4 stars with 4 being the best. For example, Zillow gives itself a 4-star rating for Henrico County, but also shows its median margin of error is 6.9%. On a $300,000 home Zillow’s value would be off by an average of $20,700. If you look at Henrico County, a home that was priced 7% high, sat on the market 10 weeks before it sold, while a home that was priced within 3% sold in less than four weeks. One simple rule of real estate is that the longer a home stays on the market, the lower the final sales price will be. Zillow is very upfront about their Zestimate being just a “starting value” in pricing a home. It cannot see inside a home and know what upgrades might have been done to a home and therefore is severely limited in establishing an accurate value.
- Tax records show what the assessed value of the property is. It is only for tax purposes and doesn’t portray real market value though it may be close or within a certain percentage of market value.
- Square footage isn’t always accurate in the tax record even though we use it as a source for square feet. You may find additional square feet by measuring the house. This can change the value of the home significantly.
- To find tax records, go into Paragon/the MLS and click on the “TAX” tab.
By now you should understand approximate market value, assessed value, Zillow value and have a pretty clear idea of where the house is and its surroundings.
- Attempt another CMA on a different subject property of your choosing
- Go to each of the 5 resources and explore how each one works
- Watch Silvercreek CMA Video (20 min – see below)
- Realtor’s Property Resource
- Tax Records: Log into your MLS or search county tax records online
- Silvercreek CMA Video: