Day One. We will be listing our house tomorrow (Thursday) in the afternoon. Apparently this is a good time to go on [tag]MLS[/tag] because [tag]real estate brokers[/tag] will be looking to setup their weekend showings. But, it is not too early so that it doesn’t come up as "new" in the minds of some brokers (who apparently have short memories, I guess).
So today is about taking pictures and writing descriptions.
Today’s most important step is something that we didn’t have to worry about last time we sold a house just three years ago. Updating [tag]Zillow[/tag]!
For those of you who don’t know Zillow is an Internet resource that attempts to appraise your house electronically. A similar process has been used for sometime by various appraisers usually in situations where an exacting price isn’t all that important. For example, if you want to get a home equity loan of $20,000 and your electronic or "drive-by" appraisal comes back with your house worth $410,000 when you only owe $300,000 on the first mortgage, nobody really cares if the house is actually worth $390,000 or $430,000 because either way you are fine for the purposes of the loan. Zillow uses a similar process by using public records to find "comparables" (houses that are similar to yours) and then applying some sort of formula to determine your house’s value. This value is called a [tag]Zestimate[/tag].
Unfortunately for those of us selling homes, an exact price is what you need.
Not long ago, Zillow was a novelty that you used to look up what your home was worth, mostly for bragging rights and conversation at cocktail parties. It even has a chart like a stock chart so that you can see the price go up and down. Now, I can imagine prospective buyers looking up our house on Zillow to see if we are over or under priced. Why can I imagine this? Well, guess what the first thing I did when I found a house I kind of liked in the area we are thinking of moving to? I Zillowed it.
Now in some cases, Zillow can be dead on. If you are looking up a house in a sub-division all built by the same builder over a period of a few years using the the same five or six floor plans over and over again and most of the streets are basically the same then you can be pretty sure that the Zestimate is pretty close. This will be due to the fact that the houses Zillow uses as comparables will be well… comparable.
The problem is when your neighborhood is very diverse, very small, and maybe very different from another area that is close by. For example, my house within a block of one of the richest areas of town (wall to wall town homes worth over $1 million on the low end…oh, that’s right, $1 MILLION for a town home that shares a wall and takes up the entire lot!). Then, a large park marks another "border" of my neighborhood. Then, about 8 or 9 blocks away is a pretty busy road. Past that road, is a very different neighborhood than mine (it isn’t any worse, but the construction period is different, and that area isn’t considered "near" the upscale shopping district that makes those town homes worth so much money). Finally, the last border marks the end of the local elementary school boundaries. Now the next school over isn’t bad, but the school my house goes to is considered exceptional (usually ranks 2nd in the district), so that makes our house worth more. So much more in fact, that if you see a For Sale sign in my neighborhood it always has the school name prominently displayed (usually on top of the sign where they normally put "Remodeled" or "Gorgeous Inside") while the houses in the next neighborhood never have a sign about which school they go to (but a lot of them are apparently Gorgeous Inside).
Another issue is turnover. While a new neighborhood may have had dozens of sales to choose from in the last four or five years, older neighborhoods sometimes have a slower turnover rate. Such is the case with my neighborhood. We moved into our house 3 years ago. It is the last time a For Sale sign has seen this block. Our neighbors moved in a year before, and that is it. The sales before that occur before the property sale records were put online. In other words, Zillow can compare my house to exactly one other house on my block. The surrounding blocks aren’t much different. This means that Zillow is using less fresh sales and therefore has to mathematically correct them more (inflation, housing market up, then housing market down) and may not be doing the best job. Yes, the housing market is worse for everyone, but nobody is getting foreclosed on around here. There are some people who aren’t trading up their cars, but no one is losing their house.
Put this all together and we have a [tag]Zoblem[/tag] (that’s a Zillow Problem). To put it frankly, our Zestimate zucks. Of course, it undervalues our house. Now, I don’t want somebody looking at my house and liking it, but then going to Zillow and thinking it is zover-priced (ok, I’ll ztop…I mean stop).
What can we do about it? Well, for starters, Zillow allows you to "claim" your house. That is, you can register and say you are the owner of your house. Once you do that, Zillow allows you to update the information about your house. For example, my basement is partially finished. That adds some value, plus, there is another 1/2 bath down there that wasn’t on Zillow’s records. Another 1/2 bath is worth another $X to the Zestimate.
Also, you can tell it about the remodels you’ve done. We have a brand new kitchen, and we re-did a bathroom. Both add to the Zestimate.
How does the remodel thing work? You put in what you spent on the remodel and then Zillow uses a formula to determine how much of that cost would flow through to your price. My wife and I are frugal, hands-on people who don’t just pay whatever pops up so we managed the price of our remodel way down so we are at a disadvantage to the suckers who used the first contractor we tried to work with and just paid whatever markup he had on his stuff and whatever his "interior decorator" wife threw into the pot. Still, a reasonable estimate of our costs adds significantly to our Zestimate.
Next, Zillow allows you to pick which "comparables" you think it should use. It also provides a text field for you to explain all of this. I picked the best [tag]comparables[/tag] I could (though I’m still not that happy with them) and wrote out why the houses outside of the small neighborhood we have shouldn’t count.
Result? Our Zestimate is now higher than our asking price (well, at least our home owner Zestimate is, Zillow doesn’t change their original Zestimate). So, we Joe and Sally Househunter pop up to Zillow and look up our house they’ll see what we are thinking and know that they can’t come back to use with some Zillow-based low offer because we’ve already been there and demonstrated what we think our house is worth and why.
Now, this part is very important. You must set your Homeowner Zestimate to PUBLIC or people won’t be able to see it when they look at your house. After all, you didn’t enter all of that info just to make yourself feel better.
I also took advantage of the opportunity to write a description of our neighborhood. Anyone from around here already knows what the deal is with this area, but if someone from out of town or the suburbs is looking, they’ll have a head start after reading my description. I’ll be adding the photos that I’m taking today to Zillow and any other relevant information I can find. The same info will go on our posting, but you can never have good news about your house in too many places.
Hopefully, we have made Zillow our ally instead of our enemy.
I know what you’re thinking, punk. Yes, it is www.zillow.com
Listing the house (who we are using and why)
Pricing the house (everyone says this is the most important thing and one of the reasons you should have a professional real estate agent; I’ll show you how we came up with our price and how you can do the same for your house)
Taking Pictures (how to take the pictures that will help sell your house)
The sign (this will be a doz
The brochure (how to make and print — or have someone print — your own brochures)
Hopefully this weekend — The Showings! (keep your fingers crossed)