Monthly Archives: January 2014

Using Zillow? You Might Be Surprized.

Using Zillow? You Might Be Surprized.

Why Zillow can get your home value wrong

While I personally believe that Zillow is an awesome product and enjoy the creative thinking that has surrounded it, there are a few things that you need to know when using their estimates of home value, or what they call “zestimates”.

They use public records instead of multiple listing service data. Depending on the town or city your home is located in, the public records are notoriously inaccurate, especially when it comes to finished area and living area.

Multiple listing service data is entered by realtors who are responsible for the accuracy and while it can also be imperfect, the MLS data is much more likely to be correct.

Because the algorithms in Zillow are heavily reliant on living area and cost per square foot, these public record inaccuracies can introduce a statistically significant degree of error into their estimate of home value.

They use a radial distance from the house location to select comparable home sales in the vicinity.

In other words, they will select all houses within a half-mile radius of the subject property that have been sold within the last 6 months.

While this makes absolute sense, mathematically, it doesn’t make sense in the real world.

The reason is, that if a property is on the edge of two different zip codes of highly differing socioeconomic strata and real estate values, the results will introduce a statistically significant degree of error into their estimate of home value.

For example, a house in South Wayland commands considerably more in price than a house in North Framingham, but Zillow will include houses in North Framingham that are within a half-mile of the Wayland house when figuring their “zestimate”.

Zillow is very good at analyzing quantitative factors (facts) but doesn’t yet have the capacity to include qualitative (feelings) factors, what we realtors call the full 360 degrees.

There are a number of highly subjective factors that help to determine a home’s value, and these factors are constantly changing with trends and popularity of … colors, materials, lifestyles and family makeup, just to name a few.

And last, just as you can check-out a car on many great websites, commercials, movies and in pictures, you don’t really know how you’d like it until you drive it.

Imagine yourself test-driving dozens of cars and then comparing them with someone else who’s only looked at them on websites, who’s opinion of value/drivability/comfort do you think would be more accurate?

So in summary, I believe that Zillow is a great website and I think it is very good at coming up with a blazingly fast sweeping generality of a home’s value. But in its present form, it will not replace the complete market analysis of an experienced, full-time professional realtor.

For a really accurate market analysis of your home by Mike Hunter contact me, I’ll be glad to help you.

Closing Checklist … Items You’ll Need at Your Closing

Closing Checklist … Items You’ll Need at Your Closing

Okay, so now you’ve bought/sold a house and the closing is happening soon.

If it’s your first time or your first time in a long while here’s a quick primer.

If you bring the following, you should have everything you need.

  • New Deed drawn up by your attorney. (sellers)
  • Smoke Detector & Carbon Monoxide certificate of compliance (sellers)
  • Title V certificate of compliance (if serviced by private sewer) (sellers)
  • Final water/sewer bill, stamped paid in full (if municipal service not serviced by well) (sellers)
  • Keys and garage door openers ( leave duplicates in a drawer in the house) (sellers)
  • Copies of any paid bills or affidavits required for work done after home inspection issues were negotiated. (sellers)
  • Instruction booklets, receipts, builder drawings and anything else you have that the buyer could find very useful after moving in to your home (leave them in a drawer in the house). (sellers)
  • Copy of receipt or statement for fuel oil in the oil tank and/or propane in the propane tank (if applicable) (sellers)
  • Driver’s license or another form of personal identification. (sellers & buyers)
  • Your personal checkbook for miscellaneous items and/or adjustments. (sellers & buyers)
  • Certified check or cashier’s check drawn in Buyer’s name or whatever the conveying attorney specifies for the difference between the sale price of the property and the amount of the mortgage less any deposit already made. The final amount will be spelled-out in detail on the form known as the HUD1. (buyers)
  • At the closing, the bank may require 2-3 months tax payment (to be held in Escrow by the Bank); PMI when applicable will be collected for the first year. The exact amount can be obtained from the mortgaging bank prior to the closing; it will be spelled-out in detail on the  HUD1. (buyers)
  • Additional fees can be paid with cash or personal checks. The exact amount can be obtained from the bank’s attorney prior to or at the closing. (buyers)
  • Personal property of the sellers can be paid with cash or personal checks. (buyers)
  • Remaining fuel oil in the oil tank (if applicable) can be paid with cash or personal checks. (buyers)
  • Paid insurance policy or binder for the new property (whichever the conveying attorney specifies) in an amount equal to the amount of the mortgage. Ask your insurance agent for advice on this matter. (buyers)
Sellers & Buyers Negotiate … Agents Advise

Sellers & Buyers Negotiate … Agents Advise

The ability to negotiate successfully is crucial not only for successful real estate transactions, but also for daily life events in general. As your agent my job is to advise and counsel you and present your offer/counter offer in the absolute best way possible, but you are the only one who can negotiate in a real estate transaction … it’s your money and your choice what to do with it.

Here are some general guidelines:

Challenge the ideas that are presented to you

Negotiating requires you to be assertive and question what you are being told. If you disagree with someone regarding the price, value or condition, speak your mind. Of course, be sure to do so diplomatically.

Become a good listener

Listening carefully and critically thinking about what you are being told can prevent a considerable amount of confusion and ensure that the negotiations run smoothly.

Be prepared

If you’re buying, what exactly does the property have that could take away from its value? What is community like? What is the average selling price in the neighborhood? If you’re selling, know your property extremely well; you cannot allow yourself to be taken aback by what a prospective buyer might say.

Aim high

If you’re selling, try marking the price of your home about 5% above what you would actually want. This will leave you some negotiating space to come down. If you’re a buyer, offer a price that is lower than what you normally would; enter negotiations with the optimistic attitude that the seller will come down.

Just a little patience

Relax. This could take a while.

Be diplomatic

Because negotiations may be a long and tedious process, it can be very easy to get irritated. Getting frustrated with negotiations that seem to be going nowhere will only perpetuate any difficulties you may be having, and may even result in an end to all talks. Keep your cool.

Be aggressive

While you don’t want to be hostile, you do want to be assertive and dominate negotiations. When negotiating with the prospective buyer or seller’s agent, be sure to try to take control of the negotiations. Talk with a strong and confident voice, and be sure to have responses for any potential arguments that may be thrown your way.

Don’t get nothing for something.

Whenever you agree to give something, be sure to get something in exchange. For example, if you are the seller and you agree to lower the price, you may want to hold back on any additional goods that you may have initially been willing to give away (like furniture).

Always give the appearance of being willing to walk away

Even if you are in love with the property as a buyer or are dying to sell as the owner, never reveal your desperation. Always give the impression that you will be willing to walk away.

Time is on your side

It’s most likely that you and the other party are eager and pressured to resolve the transaction. Acting calm and under control, in addition to taking time to think rationally, will help you in the long run. In short, just think before you speak.

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