Home Buying in Seattle>Question Details

Char, Home Buyer in San Francisco, CA

Zillow price vs. selling price vs. price i should offer.

Asked by Char, San Francisco, CA Mon Apr 15, 2013

The house i like is in pretty good condition with new septic and other features. House priced at 445. Zillow saying house worth 424. built 1975. tax assessment 451. don't see too many major issues. had an offer 1 year ago, taken off the market, now relisted. trying to figure what to offer. please let me know what your thoughts are. i know it is hard if you don't have comparables what no, but the 445 seems pretty reasonable. in a somewhat less desirable area because more rural, but a beautiful area. i can afford 445, but obviously want the best deal i can get and don't want to land up with a house that sells in the future for less. I'm not sure if prices will increase or decrease.

i was thinking offering somewhere around 433. OR 435 or 438. What do you think?

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9
Ray Akers’ answer
At the end of the day, does it really matter if you pay $435,000 or $445,000? The difference between the two prices is very modest. Prices are rising in your market area, and next year this house will be worth 10%, 15%, or even more. The real concern is, are there any serious structural problems? Is a new freeway planned nearby? If the septic system is failing, then $435K and $445K will be too high a price. If you are unsure, and have questions, then you should seek help from an agent that works exclusively for you. An agent that works for you will know what problems to look for, and he/she is your best insurance against making a bad decision.
0 votes Thank Flag Link Mon Apr 15, 2013
Hi Char,

Thank you for the question.

I dont know if it is too late to give you advice on this sort of thing but this is typically how you decide what price you should be offering:

Zillow makes whats called a Zestimate, and it is exactly what it sounds like, it is an estimate. Look at the price RANGE right below the zestimate to see how confident they are on their value of that particular home. If the price range exceed $80,000, they are not as confident on the price, and from my experience, although they are close, their Zestimate is merely a conversation starter.

Look into current market conditions: How many homes are on the market in that area, what supply of inventory do they have, what is the historical norm in that specific area in terms of pricing, etc.

Look into comps. Pending sales, Sold homes within the last 4-6 months, and active homes. Decide which particular homes to use to compare with your subject property.

Are there currently any other offers on the table? If there are, welcome to the world of bidding wars! Good luck paying what you hoped to pay! Bidding wars usually result in purchase over asking price. Ive seen it as high as 5% over.

Look into the seller: How much did they pay for the home and when did they buy it? Did they buy when the market was bad and paid too much? Are they just trying to break even? Are they looking for easy and quick profit? How much do they still ow on their mortgage? Etc.

Look at seller motivation: Ask your agent to try and get some more info on the seller. How motivated are they to sell? If it is high motivation, they can usually negotiate with you. Keep in mind however, it is a sellers market out there currently so they have more room to call the shots (To some extent)

When you write an offer, try to get the best deal possible. Have your agent maybe write up a cover letter, present the offer in person, include something personal to the seller to flatter them in the letter you submit, bring up all the comps, etc.

You should be in good shape.
0 votes Thank Flag Link Sat Feb 21, 2015
You should contact a local Realtor and get a CMA of your home. They have the most up to date information and know the area and can better assist you in pricing your home.
0 votes Thank Flag Link Wed Feb 18, 2015
This is why it is important to have an agent to represent you! An agent has access to more information on the MLS than the public, and better experienced to analyze market data regarding comps of similar sales and current market value. Zillow is only a computer program that generates averages for neighborhood sales. It cannot analyze improvements or needed repairs into its estimates.
0 votes Thank Flag Link Sat May 4, 2013
zillow is inaccurate. it sounds like you are not in a multiple offer type situation so i would go in at 435k and take it from there. assuming that you are pre-approved for a loan, it's a good offer so the seller won't just ignore you.

best case, they accept it...worst case, they say no. probable case...they counter and 440k.

and yeah, paying 435k or 445k doesn't make much of a different. but psychology plays a huge role in negotiations and i've seen multimillion dollar home deals fall through over thousands of dollars here and there with neither side willing to budge. sometimes the agent steps in to cover the difference but sometimes not...

i once bought a $90k car and walked away from the deal from one dealership over $150. it wasn't the money but it was simply because they lied and left a bad taste in my mouth...they said one price over email and phone and when i got there, it was $150 higher in hidden fees. the competitor also had the same price so i went over there.

for a large purchase such as a house, usually the buyer and seller needs to feel good about it for the deal to go through.
0 votes Thank Flag Link Sat May 4, 2013
Hi Ash,

I understand the excitement and anxiety you feel as you found out THE HOUSE is back on the market. Yet, you still have to realize your purchase plan step-by-step.

First, ARE YOU PRE-APPROVED? How do you know you can afford 445?

Second, DID YOU SEE THE HOUSE? Purchasing a house is not like buying a camera on eBay or Amazon. You HAVE TO see it yourself. You have to walk around the house and feel the vibe of the neighborhood.

Third, DO YOU KNOW WHAT IS THE SITUATION OF THE HOUSE? I see that you need help with the fair market price and you know very well that a good Realtor will not tell you a value till she sees it and does research herself. But more comes into the play is the offer negotiation!! What can you negotiation with? What is the situation with the seller? All these things you have to know before you make a decision on the offer price. Don't go with Zestimate or Tax assessment value!! If that is so easy to figure the fair market value, there is no need for appraisal!!

In other words, find an agent to work with you!! I know you are excited, but home purchase is not a small commitment. If you don't have an agent already, read my blog to see how to find an trust-worthy real estate agent for your best interest:
0 votes Thank Flag Link Mon Apr 15, 2013
Zillow has its pros and cons. Older homes in more rural locations tend to be one of it's weak areas. Ignore zillow. Do your research. If you don't have access to homes that have recently sold, homes that have just gone off the market for cancellations, pendings, expirations and the homes that are still on the market in competition with the house you like then contact a broker that does. Even if you have the access to the homes, if you haven't been in those homes or hundreds of similar homes like your broker has, you are not serving your best interest by trying to avoid using a broker.
0 votes Thank Flag Link Mon Apr 15, 2013
Ask your real estate agent to perform a comparative market analysis. Then trust your agent's conclusions and make a market price offer, assuming you actually would like to acquire and enjoy the property.
0 votes Thank Flag Link Mon Apr 15, 2013
Good Morning
I think in todays market its critical to learn your market. Know which are the best buys in the price range and area you are searching. I have taught a process that will assure you know your market to over 25,000 home buyers in the Seattle area. You will find it outlined at Your-Road-Home.com.
Properties are moving so fast many people are over paying in the heat of competition. Gather up as much information as you can before you buy and be sure to have an inspection. And if you are a first time home buyer the MCC Tax Credit is amazing.
Trulia is also a good source of information and when you are ready you will find Seattle agents and loan officers offering their services on Trulia
Best of Luck, stephen webber
Web Reference: http://Your-Road-Home.com
0 votes Thank Flag Link Mon Apr 15, 2013
Good insight Stephen!!
Flag Mon Apr 15, 2013
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