Recently, I worked with a new client to sell a home in Austin and provided her the estimated property value based on comparable home sales in the last 6 months and available public data like tax records and filings. The estimated value for her home was $30,000 lower than what she saw on Zillow using the Zestimate. This is a very common discussion I have with clients trying to sell a home in Austin.
Zillow has done a brilliant job providing information to home buyers and sellers that was historically only available to real estate agents connected via the local MLS Real Estate network. Zillow uses a proprietary algorithm that produces an estimated valuation range with a statistical 70% confidence interval. Now before you break out your college stat books let me put this into layman’s terms using specific data for Dallas County, which has Zillow’s highest accuracy rating (it does not have data available for Travis County).
- 58.1% within 5% of Sales Price
- 79.8% within 10% of Sales Price
- 91.9% within 20% of Sales Price
Let’s use this data for Travis County and assume that it holds the same high level of accuracy as Dallas County. The median sales price for a home in Austin in November 2016 was $279,000, which means over 90% of the Zestimates would be within 20% of the actual sales price. The estimated valuation of your home would be between $223,200 and $334,800. Wow! With such wide price range, how do you accurately price your home?
When setting the price to sell a home in Austin, you must realize that the actual future sold price will be what the market reflects. This means what a buyer would be willing to pay you and not necessarily what you think it is worth. Historical data is extremely valuable – a seller can see what previous buyers paid for a home in your local area, which may have similar attributes to your home. The two variables you are managing are – time and price. If you are looking for a higher price than what the market may reflect then you would need to be prepared to exchange time for that price or waiting longer for it to sell. If you need to sell fast, then pricing lower than market value will accelerate offers.
This is where working with an experienced business professional and REALTOR® is beneficial. Not only will you be provided an estimated valuation to sell a home in Austin, you will also receive the comparable home sales to go with it. You will be able to look at what the market has historically paid for homes like yours and will be able to parse the data to see how closely it resembles your home in your local area.
Knowledge is power and the Zestimate is a good starting point to sell a home in Austin but it’s just part of the story. A knowledgeable REALTOR® can produce a more detailed home valuation estimate, which will provide information to market your home based on your specific requirements of locality, price and time. Do you have all of the information you need to sell a property in Austin?