At the bottom of this posting, I've put an answer that I wrote for another question regarding Zillow. Someone had asked whether Zillow comps (in a state where it is possible to get the right information) can be relied upon. Read my posting. Then try it yourself; don't just take my word for it.
So, before putting an offer on a house--any house--you need to know what its real value is. In your question, the house might be worth $450,000...or $330,000. If you put in an offer at $350,000, you might still be overpaying. Now, really, that's not the most likely situation. But you can't be sure.
Once you determine the house's real value, that's your ceiling--the maximum you'll pay for the house. Then make an offer at or below that amount. A Realtor can provide guidance.
Hope that helps.
Here's my recent Zillow post:
No. Zillow isn't particularly reliable for any market.
Here's the text of a posting I wrote a few days ago. This dealt with a different area of the country, but I've done the same "test" in a number of different areas--Colorado, Virginia, etc. Each one comes out the same. Zillow produces a number, but when you look at what it considers "comps," they aren't. I invite you to try the same thing.
If you think that Zillow provides consistently reliable estimates of a property's value, then do a couple of Zestimates. I can randomly select a typical property in a typical neighborhood and most of the so-called "comps" aren't comps at all. Let's try it. You game?
I plugged in "89449" in Zillow to bring up some homes in Zip code. I came up with one on 138 Daggett Way. It's a 3 bed/2 bath single family home built in 1956. It's on the market for $399,000. That's what we'd call a "bread and butter" home--nothing fancy, but OK. The description says it does need some work: "A great price for this 3 bedroom 2 bathroom home with 1,512 sq ft of living space & almost 1/3 acre mostly flat & sunny.This is a perfect project for a contractor or handyman. This property has deferred maintenance and needs upgrades but the possibilities are endless for this Lower Kingsbury home."
First odd thing is that the Zestimate for that house is $574,000. Might actually be a good deal...if the Zestimate is accurate. So, let's look at Zillow's "comps."
Well, there's 1521 Bonita--a 3/2 built in 1970. Not too far off. But Zillow says it sold for $125,000. Sounds a bit low. Can you really buy that sort of home for $125,000? If so, then even the list price on Daggett is too high. But let's continue.
Another comp: 4081 Greenwood. It's a 5 bed/3 bath built in 2007. Now, I wouldn't call that a comp to a 3/2 built in 1956. It sold for $1.3 million.
Another comp: 4027 Crest. It's also a 5/3. This one was built in 1977. Again, not what I'd call a comp. It sold in December for $845,000.
Another comp: 395 Sherwood. Zillow doesn't have the number of beds and baths. And it was built in 1978. Not a great comp, since we don't know beds or baths, and it's 22 years newer. That one sold for $980,000 in January.
Most of the other comps are just as, well, incomparable.
Along with the other problems that are listed below, in some areas the homes have a great variance. Zillow does not have the tools, just as stated below, but even with these tools ,if there are few sales in the area and great differences in the homes only a hands on appraisers can give a value.
I don't know what part of Ca. you live in but take for instance the Farmers Market area of L.A., I am sure you still have some of the older homes and have a lot of teardowns with larger homes built in their place, I know this has happened in Newport Beach. Zillow may be able to handle that in Ca. but does very poorly here in Texas, especially if not many residents are selling.
A local Realtor will be familiar with all the differences including the value of the paticular construction.
Zillow may be using sales record for a few years against tax records in the general area. The comps you receive from a Realtor are accurate. I know people swear by Zillow but I find it is usless in this area, that is except for a fast view of property.
Only a good Buyers agent can advise you if the home is overpriced. Even banks do not take the advice of a web site that has not viewed the property. Hey that would be like believing the tax assessor and he/she know more.
Happy Home Shopping and Welcome To Texas - That is when you get here.
Zillow doesn't really work well in Texas as far as prices go. Not sure about other parts of the country. Here we don't record sales prices at the courthouse only mortgages so that's why it doesn't work well. For a while it was close in some of the newer neighborhoods where there were lots of people using 100% financing, but in older neighborhoods where people might have 50% equity or use larger down payments the numbers are way off. Much like the example you gave. I've also seen Zillow numbers change by $40,000 or so on the same property in a fairly short amount of time. I just wouldn't depend on Zillow or tax appraisals to value a house. A common list to sales price percentage I see is 97% and that's probably a good ballpark to use. If it listed for $450,000, maybe you could get for $435,000. Obviously each situation is different, but it would be unusual in my experience for the house to be listed at $100,000 over market value. The 97% list to sales is just an idea. There are some homes that will sell for list or more...usually those are the ones that are decked out and look good. The ones that are beaters and need work and need updates could sell much below that ratio. Zillow is good for some other information like schools, maps, etc.
However only use those sights as search tools, or a real estate site in that area that is "real time MLS"
WELCOME TO TEXAS.
Alos, no need to worry about hurricanes in Katy. I live only a couple of miles NE of Katy and we are too far inland for any serious flooding. I don't blame you for being concerned after all the media about Hurricanes Rita and Katrina a couple of years ago.
Welcome to Texas!
Not sure which property you are talking about so can't give you detailed information about it. I do know, however, that Zillow does not always have accurate information. Sometimes they estimate that value of the house higher and other lower. I recommend visitng http://www.har.com. This is the official website for the Houston Association fo Realtors, it is very user friendly and has the most accurate and current information with tons of tools for consumers.
Hope this helps.