If you’re searching for a home, you’ve probably done your online research and are familiar with websites such as Zillow, Trulia, Realtor.com, etc. But there are important differences among these sites that you should be aware of as they will impact your competitiveness as a buyer.
Accuracy – is the home for sale or is it already sold?
The main complaint we get from clients is that they find a house on one of the popular websites like Zillow, but the home is actually already sold. In some cases, the home has been sold months or even years ago. But if you are in the market to buy a home vs. just looking, you need to have accurate and timely data. I recommend using websites that derive their data and get updated regularly directly from the same MLS system that REALTORS use. Moveinmichigan.com and Realtor.com are both typically more accurate and up-to-date than anything else I’ve seen out there. The system I use as a REALTOR provides me with up to the second data on new listings and changed listings. So when a new home comes on the market, I will know instantly. When a home goes under contract (the seller has accepted an offer) and the listing broker changes the status from ‘active’ to ‘contingent’ or ‘pending’, the system is updated and we can check it. I expect that over time, the accuracy of all websites will improve to the point where there will be no meaningful difference which website you use but for now – make note of the above!
Accuracy – is the Zestimate or the Assessed Value meaningful?
Another piece of data that can confuse a potential home buyer is Zillow’s ‘Zestimate’ of a homes value. In some cases, it can be accurate, but in other cases, it can be significantly different from a homes true market value in a fast changing market. I like to think of Zestimates or the State Equalized Value as a ‘Blue Book Value’. It’s just one piece of data that you can use to triangulate the true market value of a home. Each home is unique and evolves over time and markets can change quickly – so assigning a value using an algorithm can only be so accurate. I would venture to say that newer homes with very common characteristics in a stable and predictable market can be more easily valued using automated tools, while older homes in unique and fast changing markets are more difficult. Makes sense doesn’t it?
I also need to mention public data available from the City, Township, and County websites. Here you might find data including size of home, tax history, sales, history, utility bill history, lot size, and much and more. Buyers often use the State Equalized Value as one measure of how much a home is worth. As long as that isn’t the only measure you look at, the SEV is definitely a single data point to consider when assigning value. Keep in mind assessments LAG the true market as they are determined based on past data (from the previous year usually).
If you are just casually browsing for home online, than Zillow or Trulia will usually work just fine. They have nice interfaces and a good look and feel – if you can get past all the advertising noise. However, if you are focused on accuracy, then Realtor.com or Moveinmichigan.com are recommended. They aren’t as pretty but they have better content on available homes for sale.
The MLS system we use has been recently updated and provides much better functionality and usability than before. In the past, Realtors would send out new listings based on a clients search criteria but the data in the email would expire after 7 days. With our new system, clients have their own ‘portal’ where any listing that matches their criteria can be automatically tracked. As new listings come on the market, you will get an instant notification by email – sometimes before there are even pictures and sometimes before your agent has had a chance to see it themselves! In addition, you can ‘favorite’ listings and delete listings from your portal. Anytime you want to review the homes available that match your criteria, they will be available to see on your portal site. Search criteria can be price, bedrooms, just about anything including map location. The ability to customize your search is one of the most powerful features of this service – you see only the listings that fit your criteria and you don’t have to wonder if the basement is finished or not, or if the Master Bedroom is on the first or second floor.
So now we are at the bottom line. Use every source of data available to you to round out your search BUT focus on getting the newest listings first and don’t get bogged down sifting through obsolete data. Someone else will buy the house you want while you are investigating an already sold listing. To win in today’s fast changing market, my recommendation to you: be quick and decisive and right. It’s easy to be fast and wrong, so to be right, you need immediate access to the most accurate data available. This can be provided by your REALTOR who should also be an expert in he local market. They can provide you with an ‘oral history’ and ‘local knowledge’ that you won’t find anywhere else. Supplement that with your own research online thorugh the various websites mentioned above and the local City, Township, and County Websites as well. If you do all the above, you should be well prepared for what will likely become the largest investment of your life.