Check out this interesting article on the InmanWiki… a successful transaction between two parties using only Zillow, Google and public records to find a home, establish value and do a deal, sans real estate commissions. This buyer obviously knows his target market and hopefully didn’t overpay. (But since FSBO sellers typically sell their homes for 24% less than agent assisted sales, this buyer probably got a really good deal.)
Still, he does seem to be putting a lot of faith in those Zillow Zestimates, which can be significantly off. Heck, Zillow seems to think my house is worth $968,000 this month, down from $1,038,000 just a few weeks ago, yet my neighbor across the street still can’t seem to sell his similar, somewhat smaller home for $729,000, so my true value is probably a lot lower.
Zillow relies on public data and is often behind the market, but honestly, it is pretty cool that they send me a monthly report on valuation complete with comparable sales in the neighborhood, even if their Zestimate is totally off. In a more tracty neighborhood with higher turnover, I’m sure this valuation would be a lot more accurate. read
3 comments
I truly believe that if buyers and sellers were given access to an MLS-like database, where they could look up recent sales, homes in escrow, etc…, realtors would be obsolete. There would always be people willing to pay a premium and use a realtor to show their home and deal with the inconveniences of selling a home, but the vast majority would be willing to do the work themselves to save thousands of dollars. The problem that exists today is that the “real data” is difficult to obtain. Zillow and homegain are not accurate and the data is not recent enough.
I have sold FSBO and have used realtors. I’m somewhat of a control freak, and actually had a better experience when I did it myself. Lets face it, escrow takes care of most of the work anyway. Nobody cared as much about how important it was to close on time, or saving a buck here and a buck there. When I did it myself, I had the ability to call the buyers lender a million times if I had to to make sure they were on the ball (its a good thing I did). My realtor would not have been as concerned.
As for setting the sales price - I would say its pretty easy to get comparables. Look at homes in your neighborhood with the same square footage. Lets face it, upgrades might add some value, but there is only so much value that granite countertops and hardwood floors will add. Again, it is significantly easier to price your home if you live in a tract home, rather than if you live in a custom home on a large lot.
I know realtors hate hearing they are becoming obsolete and always seem to come up with why they are not. This is just my two cents.
You are correct Renobuyer, the key is getting accurate information. If there was an open MLS, and buyers had access to the information, there would be no need for realtors. Some people may still choose to employ realtors, but it would not be necessary. The realtors know this all too well, and so they are fighting zealously to keep the MLS closed. There is litigation in the federal courts on this issue in which the NAR is spending millions of dollars in legal fees to keep the MLS closed. There are bills in Congress, which the NAR is spending voraciously to oppose. There is no other asset class, other than residential real estate, where buyers have to search in the darkness to get accurate and recent information.
Can you imagine if you were considering buying a stock of a publicly held company, and being told, well, we won’t tell you how this company is performing, and how the industry is performing, and we won’t tell you what the 1, 2 and 5 year history of the stock’s price has been, and we won’t tell you what the most recent slaes price was, and we won’t tell you what other buyers are paying for the stock today. You just have to trust us that this is a really good deal.
The realtorindustry and the NAR will eventually lose this battle. Today, there is a lot more information available than there was even a few years ago. The FTC is uping its efforts to open up the MLS. The internet is already putting chinks in the closed MLS through sites like Zillow, as unreliable as they are now. They will get better. The closed MLS is living on borrowed time.
Although there are some valid points made in the above posts concerning the lack of need for selling agents in an informed and open marketplace, I would nonetheless opt for the use of the right agent in selling my home. I am an attorney, not a real estate sales professional.
Depending upon the price range and type of home concerned, self-help as a seller precludes access to a qualified buyer segment. I represent numerous entertainment industry families in that segment, and I am aware of their shopping preference: They simply will not do the searching, the legwork and culling-out of prospective properties. They select a buyer’s agent, and give that person the assignment, and expect to be shown 3 to 5 properties after that work has been done. So if your property is being marketed in a way that the buyers’ agents won’t include it in their reviews, you have no access to those potential buyers. It doesn’t matter that such exclusion may be motivated by improper or self-oriented reasons, the result is the same — the property is not considered to be among the finalists to be shown the client buyers. The buyer feels it costs him no more to shop this easy way. This level of buyer is not going to search websites or read the paper and go to open houses and do his own searching, he is a person used to having services people take care of needs, whether they are legal needs, financial, and everything else from housekeeping to pool cleaning.
Thus I believe that for the foreseeable future, the higher-end properties which would be of interest to the high bracket potential purchaser, are best marketed through an agent. Pay the freight and just consider it an unpleasant cost of accessibility to the right category of buyers. Those people who are self-shopping via Internet search sites, reading ads and driving around to open houses, likely do not include many buyers who could realistically buy the $1.7 million+ house anyway. A few are in there, but the better qualified ones are letting agents do that work, so why market in a way to exclude them?