A little clarity anyone?

Question

Hello again BP world. I'm trying to run some comps and Im getting little confused. I see what trusted sites like Zillow, Redfin, Realtor, and Trulia say about the properties value. Now is that value of the property in its current condition or the Estimated Value. I ask because I also use Prop-Stream thats gives the estimated value. Just wondering why theres a almost a 30 thousand dollar difference from the trusted websites vs prop stream.

Thanks.

Gary Parilis · Answer

I think you can trust the individual comps. I just wouldn't use the summary value they post.

David M. · Answer

@Deangelo Mack

I don’t and wouldn’t trust any of your “trusted” sites.  They notoriously don’t estimate Values well.  They are using algorithms applied all across the country with little regard to conditions of the property.  Zillow’s zesitmate is known to be off.  Their rental estimate can go bonkers.  For example, I had one investor think his numbers worked great because this smaller house we were looking out would fetch some $2500/mo according to Zillow.  Nothing in that area rented for more than $1800/mo, and those were large houses.

Also, while the real estate portals (eg Zillow, Redfin, etc) are pulling info from the MLS’ in the area via IDX and syndication, data corruption occurs often.

While I have even said that the data is widely available, this is also the reason to get your real estate license so that you can directly access the raw info.  Plus, I find the MLS interface better since it’s designed for it as opposed to the portals which are designed for driving client traffic and the like.

Good luck.

Dylan Johnson · Answer

@Deangelo Mack Run your own comps my friend. It also never hurts to reach out to an agent or PM company in that area to get a more "boots on the ground" perspective. They might be able to provide you with insight that would not be available to you thru these public sights. Treating these major syndication sites as gospel truth may not pan out the way you would like it to in the end.

@Gary Parilis makes a good point to use the median of those number if you absolutely have to. True value is always easier to stand behind when you have an experts opinion from the area. Hope this helps.

Gary Parilis · Answer

@Deangelo Mack, those "trusted" sites aren't always accurate. In fact, they're often very far apart from each other. If I wanted a super rough ballpark, I guess the median (or mean) would be reasonable. But that's not nearly precise enough. Better to look for comps yourself. For instance go to the "neighborhood" section on the realtor.com listing and you may be able to find links to recently sold similar properties.

Michael Noto · Answer

If you are looking for sold comparable data Zillow is usually accurate because they pull the data right from the local MLS. At least in Connecticut they do so I am assuming it is the same everywhere.

If you are looking for estimates on ARVs for properties that haven't sold then that is something an agent can do for you pretty easily on the MLS and they will probably do at no charge for you if you are their client. If not, just throw them a couple bucks because the accurate comp info is probably worth a lot more than the relatively small sum you would pay them for their time.

Aaron K. · Answer

Because they are probably all a bit wrong, you need to run your own comps for a true value.  They have different methods of value, Zillow for some reason seems to like incorporating the tax assessor and working from there, which is often a bad idea I don't know about the others though.

Deangelo Mack · Answer

Silly question but what’s the cheapest way to run comps. I’m kind of on a budget and don’t want things to get to pricey.

Filipe Pereira · Answer

@Deangelo Mack there is a saying amongst real estate agents that "the A in Zillow stands for accuracy". If you haven't noticed, there is no A in zillow. ;) And I promise you this applies in more than just my home market of CT.

Always, always, always run your own comps or get them from an uninterested (in the deal) 3rd party.

Deangelo Mack · Answer

Thank you @Gary Parilis and all. I actually agreed on a price with the seller about 30mins about. I dont know if I got it low enough. But judging on what similar homes sold for in the past. I could maybe score a 5k on this deal. Thank you all for your responses.

Deangelo Mack · Answer

@Gary Parilis Redfin has that as well. I just didn't know if It should be trusted or not.

A little clarity anyone?

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