Using Zillow as a ballpark estimate?

[phlemboy]

Hey all,

         I've used Zillow.com (it's free). The value on my house used to be way under the appraised value. They have a new version wich brought my house value much closer. It appears to be consistently lower. Is it a good idea to use Zillow as a ballpark estimate? They also have comps of actual sales. Nothing will replace a full appraisal. Just looking for a preliminary filter. Thanx.

[fadi]

I got a call yesterday from a guy who said his house appraised for $155k and wants to walk away from $115k loan. I pulled up zillow, it showed it at $150k... so far so good! I pulled up the Tax Appraisal for 2007, it was I believe $130k... GREAT! they are always below market value.
I pulled up sold comps for the past 6 months in that area... That same floor plan within 0.25 miles radios are selling for $115k with average days on market 111. HUH? I went back 1 year... same results... I pulled the expireds, same thing... houses not moving in that area and those that moved went for cheap price.

[phlemboy]

 That's amazing to see the tax assessment higher than the market value. But I guess if it's a rapidly declining market that can happen.I'm looking at rentals which makes the picture a little more clouded. But at least the comps are the actual sale prices and I can verify those numbers from various free sources. I'd go with that prliminary value initially. I would think that by using comps. you could get a ballpark market figure at that time. I wonder how the appraiser makes adjustments when he does a property value. I'd hate to pay for an appraisal, inspection etc.. when I can filter out the bad deals.

[fadi]

Actually the market here is not declining. We are not seeing appreciation, but no decline either. I believe that area not as desirable.

As far as appraisal goes, it depends what you aer getting an appraisal for. Some will get you the price you are looking for and justify it to help you refi for example. I never go by appraisal, I always go by the comps.

[phlemboy]

I'm looking for an honest appraisal when I purchase a property. I'd rather have an appraisal on the low side. whether it's a refi or purchase. I've had appraisers ask me what price I was hoping for on my own home. I told them what I'd like it to be. but I always told them to give me an accurate number. This way I don't get in too deep and they don't risk losing their licence. I think it's always a good idea to get as much info as you can on your own. Then you can compare the numbers and see how it lines up.

[jdproperties]

fadi, the properties that you have bought to fix up then sell in let's say the last year or so, have you put any of them on the market and if so have you what was the outcome ie, sat for a long while or just simply won't sell

[phlemboy]

Hey fadi. I just read you quote at the bottom of your reply.. That's a good one

[tatertot]

I don't believe in using any sort of ballpark guess when it is my own big chunk of money that I am putting on the line.

One of the advantages of investing in you own neighborhood is that you can constantly monitor asking prices and see how fast properties sell. That will give you a pretty good "ballpark" idea of whether or not a price is good.

Then you have to do you research and get firm sold prices AND GO AND LOOK AT WHAT SOLD FOR THAT PRICE.

Condition affects price, next door neighbors affect price, traffic noise affects price. Views have a huge affect on price. You can take two identical houses in my town, in the same condition, right across the street from each other, and the one with mountain views will sell for $30,000 more.  So what the house across the street sold for is not necessarily the value of the house I am looking at.

The house on the busy street is worth less than the house than backs up to it's back fence that has no traffic and can't hear the traffic noise.

If you want to be successful, put in the time and effort to keep on top of your market. If you are told of a bargain, there shoul be a bell that rings in your head that tells you to get into your car and go and look immediately. You have to fine tune and maintain that bell to keep it working.

[phlemboy]

All I was talking about was getting was getting a decent idea of a property's value. You'll have to pay for an appraisal anyway. You won't know that value until you pay for it. Are you gonna pay $300 for every property you see? The actual question was about Zillow's accuracy. It has nothing to do with not wanting to do any work whatever else you were implying. It's always fun when I strike a nerve

[fadi]

fadi, the properties that you have bought to fix up then sell in let's say the last year or so, have you put any of them on the market and if so have you what was the outcome ie, sat for a long while or just simply won't sell

I don't do major rehabs, the most I paid for rehab so far was $12k. They used to move quicker during the summer. I have a house that been on the market for over 2 months now and it is killing me...

[jdproperties]

Your honesty with your experience makes you a trust worthy guy. Thank you for that.

[fadi]

jd, are you in San Antonio or Austin? if in San Antonio, ping me so we can meet sometime. I am heading to Seattle on sunday and won't be back till Friday.

[SpencerB]

Zillow is fine for gathering basic info, but I wouldn't count on their "zestimate."  They include comps too old, and unrelated (ie, mixing condos and SFR's).

Also, I'd suggest learning to do your own appraisals rather than paying someone $300/pop to give you their own opinion.

FYI, check out www.cyberhomes.com  Dont have much experience with it but there seems to be much more data than zillow.

[phlemboy]

The problem with doing your own appraisal is the bank may see a conflict of interest. That's why they usually want you to use one their appraisers. My goal is to be able to get as close to an actual appraisal as possible without paying for it. If it's that far off, I move to the next deal. I think the best way would be to use comps. But sometimes it's tough to compare apples to apples. I'd like to know how they make adjustments in a situation like that.

[DeeinAustin]

All I was talking about was getting was getting a decent idea of a property's value. You'll have to pay for an appraisal anyway. You won't know that value until you pay for it. Are you gonna pay $300 for every property you see? The actual question was about Zillow's accuracy. It has nothing to do with not wanting to do any work whatever else you were implying. It's always fun when I strike a nerve

As an investor, you have to start learning true sales values in an area using MLS comps, talking to neighbors, watching how much homes are being listed, etc. The FLIP book is actually pretty good at giving flippers a system to follow, one of which is to become an expert on what homes sell for in your target area. If you don't know, then you can use zillow for a roundabout figure, but I don't use it at all. It's too far off in the areas I work because the homes are unique, some have views or lake access, etc.

So yea...use zillow if you don't know at all, but at least be an expert in 1-2 areas that you focus on.