Zestimate questions? 4 steps for getting real on price.
One of the trickiest situations for a sellers agent to overcome is Zestimate, aka Automated Valuation Models (AVM). These AVM’s are readily available for any prospective client to peruse independently. Whether it be Zillow, Redfin, Realtor.com, or any publicly available AVM it provides a stiff challenge for an agent to overcome. After all, what could your average real estate agent possibly know that a publicly-traded multi-billion dollar tech company does not? It turns out quite a bit. Here are a few tricks that will help you overcome Zestimate and the other AVM of the world.
Step 1.
Present your client with all of the AVMs that you find.
Most of them are using ancient data sets. You will likely find a high discrepancy in the property value. Some will make your client very happy, and others will doubt them. This first step aims to demonstrate different estimates and how only using AVM is not an effective way to value a property.
Step 2.
Present your property valuation as you usually do.
Point out that the AVM’s are operating off of outdated data points and are automated vs. your expert knowledge. This is why you, as a real estate professional, would provide as accurate a property valuation as possible. Any AVM will be averaging home values in any given neighborhood based on historical sales — not property condition or the level of amenities of any specific home.
What is an automated valuation (AVM)? It’s a fast and easy way for homeowners or prospective buyers to get a ballpark value for any given home.
Step 3.
Compare and Contrast your CMA vs the AVM.
Highlight that your CMA is using the absolute most updated information. While the range of AVM’s are literally just that. The best guess is based off of market data accumulated in the past. Highlight that it does not take into account your local expertise. Your CMA is only accurate as of today. If they wait two weeks to list the property with you, you would need to run a new CMA to have the most up-to-date information and recommend a listing price.
The best and most accurate valuation for any given property will be a Realtor’s comparative market analysis (CMA). Instead of simply looking at overall market trends and a home’s configuration, a CMA takes into account property conditions, amenities, upgrades, condition of the overall neighborhood and other specifics that an AVM cannot effectively address.
Step 4.
Conclude your presentation by removing the pricing Objection.
The number you see in our CMA is the recommended list price if you chose to go on the market today.
Since we are not going on the market today, we will rerun these numbers the day before we go live to ensure that we’ve dialed in the list price correctly for that market at that time.
Even then, the final price you receive is going to be contingent on:
- The level of your amenities
- The amount of property preparation you are willing to do
- Professional staging
- The quality of the photos and other listing media
- The state of the market when you go live
- Most importantly, the number of buyers who are currently out looking for a home like yours (once it hits the market) and what they are willing to pay for it.
Once pricing is off the table, you can then focus on the things that differentiate you from other agents.
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