312 Estate Experts versus relying on Agents regurgitating search engine Real Estate Values
In short, some websites who provide you estimated values, change its estimated values based on list prices. Here is an example of 5 homes we represented:
For both buyers and sellers, we always find it very interesting the initial value bias one has on various properties. Over the years we know it primarily comes from large real estate websites who offer their estimates of a home’s real estate value. Many agents either work for such companies or pay to gain new client leads. Many people we initially meet take these real estate values as fact.
Over the years we have had some interesting conversations. The luxury market traditionally a buyer or seller will use an expert realtor. However, our office will never forget when a buyer offered $1,000,000 less on a $2,800,000 home because of a search engine’s estimate. Shortly after the home went under contract close to our asking price the buyer with the $1.8 offer marched into our office, mad as can be, because our Seller would not counter the buyer’s initial ridiculous offer.
Many people will read on these search engines disclaimers as well as proof of how accurate they are. In 2020, we did a listing appointment where we were curious as to the value the seller had placed on their home based on the prospecting agent using their real estate brokers algorithm estimate. Our valuation which was over a 20% difference. We listed on the off market and sold the home in our price range we gave to them. Our client was very happy but confused how he received statistical evidence how the other company’s valuation was so accurate and had the statical figures to back it up. Again, the other agent used a estimate that we were able to tie to the estimate on the site.
As the table above shows, we found interesting that one search engine changed its pre-listed valuation moments after the home is listed on the mls. Obviously, its accuracy will be closer to the closed price if it adjusts closer to the list price. The next few homes we put on the off-market database; we tested our theory that some of these search engine real estate value estimates adjust their price based on the list price.
Here are 5 examples of homes 312 Estates Sold compared with popular search engine valuations:
We have found our expertise valuation benefits both buyers and sellers and the above table proves this out. Clearly, the five sellers collectively in the above table put nearly $650,000 in their pocket. Note, all of these listings were cloned so other than price all statistical data remained the same. We did not include a few homes we sold off market that made changes to the home which the search engine algorithm would have no knowledge and would be an unfair comparison. Cloning the listing provides the same stats the algorithm is using on the pre-listed valuation as the post-listed valuation other than price.
The table also shows the post mls valuation can be high. We have experienced this multiple times with buyers where we feel that the home is not worth the valuation price.
In some cases, the valuation can be quite high compared to our value. If by chance the search engine valuation considers the realtors listing price and the agent list price may miss greatly on the price. A buyer can easily be led astray.
We hope this information has been helpful in showing you the benefits of using an expert. Neighborhood expertise, analyzing each situation, 2nd to none marketing, persistence, and craftiness to achieve the best deal for our selling and buying customers will not ever be surpassed by an algorithm. We look forward to discussing your needs.
Update! We have had several who have questions regarding the above table and are demanding proof. Here you go!:
1346 W Addison
Another interesting side note is Redfin’s historical valuation of the property has changed. You can see on the historical pre-mls valuation link, Redfin price prior to the 10/5/2020 sale had the home priced as low as $870,809 no it is much higher.