It is the most applicable and universal statement ever spoken about real estate.
In order to be successful in real estate, you really have to be able to price properties accurately and you better be at least as savvy as the person you are buying from or selling to. Many feel that AVM’s (Zillow/Trulia) the Public Records (tax assessments) and private appraisals have decreased the chances that mistakes will be made but in reality, it really hasn’t. All of these tools existed in 2007 yet the market moved in many cases 30-40% in a 12-18 month period beginning in early 2008.
The takeaway is that correct analysis for both buyers and sellers comes from understanding the metrics that affect the individual market segment and asking the correct questions to lead you to the correct answers. As an example:
- Zillow will not make the correct adjustment for a 3 bedroom home in a 4-5 bedroom neighborhood.
- It is highly doubtful that any tax assessors have ever been in the home yet assessed value is an input into the AVM models.
- Pricing can change by 20-30% by crossing one street in an urban environment
- Zip codes are not reliably reflective of value lines (23235 covers properties in both City Zone 60 and County Zone 64 with RADICALLY different value spreads) yet are often used to establish values.
- Price per foot calculations are not linear.
Establishing a value for a property requires an innate understanding of the inputs that form the value curve. Doing it well is an art and not the science that many would have you believe.
If you’re considering selling your RVA property, we’d be happy to do a custom, in-depth analysis of your property.