Part Three: Can You Guess What This Home Sold For?
Welcome to Part Three of: Can You Guess What This Home Sold For? To catch up go to:
We’re talking about the nation’s fastest growing indoor sport: Armchair Real Estate – part fantasy football/part tv game show competition. There’s a huge home audience playing along with the market right now, testing its skill by guessing what homes recently sold for. There’s even a more advanced version that requires players to guess what homes WILL sell for when the dust settles in the multiple-offer moshpit.
So, what about Zillow Zestimates? Can players get an extra edge by using one of those ubiquitous online home valuation tools to discern what homes will sell for? This is where I can share some backstory on a sale that just closed in a cute little south county beach neighborhood.
The list price was $1,499,000 and the house had 3 bedrooms, 2 baths, 1450 sq ft and a framed ocean view that was nice but not panoramic. There were 34 offers after the first weekend and even as the listing agent, I had no clue what it would ultimately sell for. Of course, neither did any of the 34 buyers or their agents.
After we went through the multiple-offer process and accepted an all-cash offer with no contingencies and a five day close, I went online to conduct a stealth test of the top-ranked home valuation sites. Do they really have the secret sauce? Would they be able to hazard a guess that was better than an educated guess from a human? Should we all be moving in the direction of instant I-Buying for a fair, quick and transparent transaction process?
Here are the values they came up with: Zillow guessed $1,562,800. Redfin guessed $1,763,822. Realtor.com guessed $1.442,300. Smart Zip guessed $1,110,410. Chase guessed $1,438,500. Homes.com guessed $1,577,593. Rocket Homes guessed $1,341,000. Realty.com guessed $1,054,000. Bank of America guessed $1,378,393
As it turns out, that little beach house sold for $2,228,000 and even the highest of the “best” online valuation sites was a whopping $524,178 off on the end result! Most were between 50-60% and some as high as 80% off! Not exactly a resounding endorsement for the future of I Buying! I guess the good news is that home valuation sites are free. The bad news is that they are terrible!
NEXT WEEK: Introducing Tom’s Back-of-the-Napkin Wild-Ass Home Guesstimator Tool