One of the first things most folks do when they're thinking about buying a home is look online to see what kind of homes are for sale at what price. But first the question is, where to look online?
When I google "homes for sale," I find that what comes up on top, of course, are the sites that pay to come up on top: Redfin, Zillow, Trulia, then Realtor.com. All of these sites charge real estate agents to have their names listed along with homes for sale. Click on a home and you're likely to be contacted pretty quickly by someone who pays to advertise on the site.
Zillow is very popular because of its "Zestimate," "Zillow's estimated market value" of a home. While it features a value in large print, the smaller print shows a range – often very wide – and the big print value is usually around the middle of the range. The Zestimate is an AVM, an automated valuation model – a computerized calculation of the range of value of a home. As Zillow itself admits (in a somewhat buried disclosure) their AVM algorithm has totally changed over the course of its lifetime. No matter how they change it, though, the algorithm still hasn't seen the home in question, nor has it seem the comparable homes, so it's pretty much guesswork as to where a given home fits in. According to Zillow, in the Boston Metro market, about 300,000 homes haven't been considered by their Zestimate. Of those that were considered, just over 50% of the Zestimates are within 5% of the sales price range (either higher or lower). The gap is greater in some other metro areas. The median error is close to 5%. That's not really very good, especially considering its a range. When you're figuring out how much to offer, and how much the property's fair market value actually is, you need to come closer than that. A 10% spread outside an already wide range just won't cut it. When the appraisal comes in lower than the agreed-on price, you can't say, "Well, it's close."
Some sites get their information from real estate information brokers; those are the sites that often feature incorrect data: homes that were never for sale are listed as being for sale; homes that were for sale but are now off the market are shown as still on the market. The more reliable sites, like realtor.com, get their information directly from the multiple listing services (MLS). That information is usually updated on those sites periodically, usually at least daily or sometimes as often as every fifteen minutes, or continuously.
Your best bet is to look on a site from a trusted real estate brokerage or even an individual broker. You need a site that will let you search for what you're looking for, and keep you informed as the market changes. My own site, www.devallon.realtor -- a kind of sub-site of CBHomes.com -- does exactly that. In addition, since I can see what homes you see and which ones you save, your search is a dialogue with me that lets me make suggestions to you about your search.
You might keep in mind, incidentally, that not all sales agents and brokers are Realtors(r), bound by the Realtor Code of Ethics. The larger brokerages require their sales agents and broker associates to be Realtors(r); at the same time, they make available a good deal of high quality training and real estate education for their agents.
So, in the end, you probably should start looking at a major site tied directly to the MLS, like www.realtor.com, or a major brokerage site also tied to the MLS like Coldwell Banker's www.cbhomes.com, or (shameless plug) my site, www.devallon.realtor. In any case, you only need one good site. More is a waste of time and redundant.
In the meantime, though, there's the question of how to pick that agent to represent you. I'll deal with that the next time. Be sure to subscribe to this, so you won't miss that next one.
All the best to all of you, and let me know what you think.
I'm Devallon Bolles PhD, with Coldwell Banker Residential Brokerage in Winchester, Massachusetts, and I’m the House Doctor. I will guide you home. Contact me.