Should You Trust Zillow With Your Home’s Value?

Zillow’s Zestimates can be deeply flawed when it comes to determining your home’s value. Here’s what you should do instead.

I get a lot of questions from people asking me if they should trust the value that Zillow gave their home. 

To answer that, let me share a few facts with you about Zillow. As a company, they started in 2006. Prior to that, they weren’t involved in the real estate market. Last time I checked, they haven’t sold any homes, either.

Zillow is basically a company that collects whatever data they can find and then puts it into their website to determine home values. The one thing Zillow can’t account for is the upgrades or special features of your home. Think of it this way: has Zillow been in your home? Of course not.

Zillow's estimates, called Zestimates, are determined by an algorithm based on comparable homes sales. In the greater Milwaukee metro area, Zestimates can be off by as much as 10% or more. Zillow even admitted that 46% of the time their Zestimates were off by at least 5% or more. 

Zillow’s Zestimates can be off by as much as 10% or more.

As you might’ve heard by now, a homeowner in Illinois actually filed a lawsuit against Zillow because they claimed their Zestimate harmed their home sale. This may yet turn into a class action lawsuit. Zillow knows they have a problem, and they’ve gone as far as offering a $1 million prize to anyone who can fix their algorithm. 

In the 11 years since Zillow has been around, whenever I get calls from prospective buyers about homes they’ve found on Zillow, I’ve found that 35% of the time their information is inaccurate. Our website’s information, on the other hand, is 98% accurate. 

Taking all of this into account, I wouldn’t put much credo into Zillow’s Zestimate. If you really want to know the value of your home, call a professional Realtor. We can physically look at your home and all of its upgrades and features to provide an accurate valuation. 

If you have any questions about Zillow or you want to know the real value of your home, don’t hesitate to reach out to me. I’d love to help you.

7 Keys to Winning a Multiple Offer Situation in Our Market

To win a multiple offer situation as a buyer in our Greater Milwaukee market, I have seven tips for you to follow.

In our current market, if you see a home you like that’s a hot property in a favorable price range, there could be multiple offers for it. 

If you find yourself in this situation and have to compete with other buyers, here are seven things you can do to make your offer the best of the bunch: 

1. Make sure the seller knows you’re qualified. The best way to do this is to get a pre-approval letter (not a pre-qualification letter) from your lender and submit it along with your offer for at least the mortgage amount or higher. 

2. Submit a large earnest money deposit. A normal deposit in today’s market is 1% of the purchase price, so make yours 2%, 3%, or even 5% of the purchase price. If your offer doesn’t get accepted, you’ll get that money back anyway. 

3. Find out from your agent what’s important to the seller. Do they prefer an earlier or later closing date? Do they want certain items excluded from the sale? Your agent can find these things out by talking to the listing agent prior to you making your offer. 

4. Give the seller time to move. I understand you want to move in as fast as possible, but normal closings take about 45 days, so if you’re expecting them to be out in 20 to 30 days, that’s unrealistic unless it’s a vacant property. 

5. Consider shortening or waiving some of the contingencies you have. For example, instead of waiting two or three weeks to do a home inspection, do it within seven days. If you think the property is good enough as it is, consider waiving the inspection altogether. The fewer contingencies you bring, the better chance your offer has of being accepted. 

6. Let the seller know you love their house. I suggest writing a brief letter to the seller outlining why you love their house and why they should pick you to be its buyer. And remember—be sincere. 

Make your first offer your highest and best one.

7. Make a good offer. Make your highest and best offer now because you may not get countered. Excuse the listing price and have your agent do a comparative market analysis—sometimes properties are priced below market value, and you may have to offer thousands of dollars more to get that property. 

If you have any questions about getting your next home in today’s competitive market, don’t hesitate to reach out to us. We’d be happy to assist you.

Greater Milwaukee Area Market Update

Today I wanted to give you a market update on how the market has been doing the last seven months.

Now that we’re into August, I thought I would take some time to give you a market update recapping the last seven months of this year. I’ve laid out the current statistics compared to this time last year below.

If you’re thinking of selling, now is the time to do so.

• Number of homes available for sale is down by 12%
• Number of days on market decreased from 61 to 39 days
• Number of listings also decreased by 2%
• Number of homes sold is down 9%, mostly due to low inventory
• Median sales price has increased 5% to 6% in the metro area
• Milwaukee County sales price is $160,000
• Waukesha County sales price is $308,000
• Washington County sales price is $255,000
• Ozaukee County sales price is $305,000
• Racine County sales price is $171,000

Inventory is low and prices are going up—so if you've been thinking of selling, now is the time to do so. Based on these statistics, we’re in a firm seller’s market in the metro area. For buyers, the interest rates are still low and you can find a great deal on a mortgage if you’re looking to buy.

If you have any questions on the market or you’re looking to buy or sell a home, please give us a call. We’d be happy to help!