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The Cost of Pricing: How Technology, Psychology and Timing Impact Listing Value

by Peter Thomas Ricci and Megan Oster

Battling with the Syndication Sites

The basic problem with real estate data sites like Zillow, explains Danielle Moy, an agent with Coldwell Banker Residential Brokerage in Orland Park, is that the numbers rely on incomplete data.

“I tell clients that Zillow isn’t accurate because it doesn’t take into account vital details, such as amenities,” says Moy, who was recently named to the prestigious Coldwell Banker 30 Under 30 List. “It’s only providing an average, and that doesn’t work, because homes aren’t cookie cutter. Zillow calls it a ‘Zestimate’ because it’s not a real estimate; it’s an average that’s inaccurate.”

According to many agents, the problems with Zestimates are myriad: they do not consider improvements or updates to individual homes/units, or the condition of the property; amenities, both in the listing and neighborhood, are not factored; and lastly, views and building height do not play a role.

Despite how the Zestimate is calculated, Moy says many of her clients study them (especially those of their neighbors’ properties) to gauge the value of their home, and then request she list their property at a price consistent with those Zestimates. That reliance, she says, requires her to do her homework before meeting with clients.

“It’s important to present them with a report that takes into account all of the vital details – for example, view, which is typically a premium in my market, and it can really affect the price,” Moy says. “People are willing to pay more for it. Finding an existing home that has a view is hard because they are so in demand.”

For Noel Christopher, the vice president of institutional accounts at Investability.com, an online search and acquisition platform, who is also a broker with Century 21 Affiliated, that kind of market research becomes a distinguishing trait for agents.

“It’s standing your ground,” Christopher says. “It’s a matter of reinforcing your integrity as an agent, that you’re not just lazy or that you don’t just want to sell the property quickly.”

That said, Christopher does not ignore all big data sites. Though he acknowledges that the MLS is the best source for local data, he does use other sites to complement his research. For instance, Christopher works with many investors in his business, so in addition to the MLS, he utilizes RentRange.com, which provides rental data, analytics and valuation solutions that can assist investors. He also uses his own Investability, a Zillow-esque site that, along with including off-market homes, also features equity, yield and other investor-centric metrics in its criteria.

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