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550 South Dixie Highway
Coral Gables, FL 33146
So, Zillow has changed the real estate world for buyers, sellers and realtors. A day does not go by that a client doesn’t say, “Well, Zillow said my home was worth this” or “that house is priced too high because Zillow said it was much lower”. It has been a great tool for buyers to gain knowledge of the market, but most realtors cringe when they hear that someone wants to value their house or is determining value on a potential purchase based on a “Zestimate”. It only makes sense, right? How can Zillow truly value a property without being in it and determining finishes and special features. We all know price per square foot is just a way to gauge price, but, as a realtor, when we price a home, we take into account much more than the size of the house, number of bedrooms and bathrooms and lot size. This past week CBS’s Norah O’Donnell asked the CEO of Zillow, Spencer Rascoff, about Zestimates and their accuracy. He said they have a “median error rate” of about 8 percent. Kenneth Harney wrote an article that was in the Miami Herald bringing light to just how far off these Zestimates can be and, while 8% might be the national median, it seems they can be much further off in different areas. He reports that some places in California are off as high as 26% and Somerset County,Maryland has an error rate of an alarming 42%. In the next few days I am going to do a local study and will report back what I find in Coral Gables, Coconut Grove and Pinecrest. Rascoff did say in his interview that Zillow should be considered “a good starting point”, but insinuated it should not be the last word. We all must remember this, it is just a starting point!! For information on new listings or if you are looking to list your home, please call me directly at 305.798.8685 or visit my website: Luxury Miami Real Estate.
My focused dedication as a realtor in my home town of Miami for over 20 years, consistently puts me at the top of my field. Whether you’re looking to buy or sell your home, let me help you from start to finish with my results-proven: professional marketing, excellent property exposure and comprehensive experience.
As the #7 Realtor company-wide at EWM in 2014, my focus is on Coral Gables, Coconut Grove, Pinecrest and South Miami — specializing in luxury real estate and waterfront properties. Call me today and let’s get started!
One of the most common questions I get is how to price a property in this market. Over the past year we’ve found that the closer the house is priced to where it will sell, the faster it sells and the higher the price. While this sounds obvious, many people believe that pricing higher will give them room to negotiate and hold a higher price. Sales in the Gables over the past 6 months from $800,000-$1,000,000 revealed a total of 18 sales (not including foreclosures & short sales). 7 sold in less than 60 days averaging 4.71% off the asking price, 3 sold between 60-120 days and they averaged 12.33% off original asking price, and 8 took over 120 days to sell averaging 23% off original list price. It becomes clear that pricing is critical to the length of time a property takes to sell.
While often hard to know what the correct sales price will be, it is critical to be objective in pricing, look at the comps and listen to other people’s perspective of the house. Often the owner or agent is emotionally attached to a home and is not as open minded as they should be. As the inventory depletes and the buyers become more active, it is clear early on as to how the market is receiving a home. Don’t mistake the fact that the market is very active at this time and buyers are willing to pay what they deem a fair price, but not what they believe is overpriced.
Having been with me during all 20 of my years in real estate, my husband’s favorite lesson learned is how “your first offer is always your best.” He has seen it over and over again with my clients through the years, and he will discuss it with anyone that will listen. The truth is, your first offer really is almost always your best. When a new listing comes on the market, the first people who are going to call you to see it are the ones that have been out there actively looking for a while and are aware of the new listing popping up. They are the most anxious to see new listings because they’ve seen what’s out there, they know what else is available, and they understand the market having seen everything. They don’t have to look at your house and then go see 20 others – they’ve already done that. So they’ve done their homework and if your house is priced properly, they will be excited to come across yours! That excitement is natural at the onset of a new listing.
While sellers sometimes don’t feel like that first offer is exactly what they wanted, it’s almost always the best offer you will see. It also often comes relatively easily, making the seller believe if it was this easy the first time, we’ll just replace that buyer. My advice to my clients is never to quit on your first offer until you’ve tried as hard as you can to make it work, because almost every time, this is the buyer most ready to do something. But it doesn’t just stop once the offer has been accepted. I have seen too many times that a buyer and seller finally get under contract and then have unexpected things show up on the inspections. The buyer asks the seller for a credit, and the seller says no and the home goes back on the market. Now, that seller must disclose any of these inspection problems to everyone else that looks at their house, and future offers come in at a lower price.
Obviously this is not foolproof and there are exceptions to the rule, but in all the years I’ve been in this business, it has proven to be true more often than not. Respect that first offer, and don’t hold out for less!
As a realtor, my most asked question is “What is my home worth?” And when people ask me that question, I sit down and do comps, I analyze their particular market, I look at graphs of data and pending sales, and I come up with what I believe to be the value of their home. But these days, the results are almost comical! Because we work so hard to come up with numbers and analyze all this data that we have access to, but at the end of the day, I continually find that our prices stand where they were back in 2003 and 2004. And we have been consistently around those values for the past year. The graph below shows the average price per square foot of all sold homes in Miami-Dade County since 2003, and you will see we are right there, back where we were in 2003!
So while I’d like to portray myself as a genius, the reality of it is that the market pretty much is what it is.
People are always asking me how’s the Miami real estate market? How are you doing? How’s the year going? I am lucky and thankful to be able to say that I’m actually having a great year. I’ve had a lot of transactions close because there are a lot of buyers out there ready to buy. So my listings are being shown, offers are being made, and deals are being put together.
The main problem I see with this market is that there are still many homes on the market that are overpriced. So buyers are being turned off from homes they don’t think they can afford, while if they made an offer, the seller might be more willing to come to terms with the current market than their price reflects. It seems sometimes that you don’t know what a seller’s “real” price is until you make the offer, get the conversation going with them, and see where they really stand.
A year ago, we didn’t have many comps to use when pricing homes, so knowing where something would sell was more unpredictable. These days however, things are selling again so we have good comps to use when looking at how to price a house. You can get a pretty good target of the value of a house today – something that was more difficult a year ago.
Sellers have to be realistic and understand that even if they did get an offer higher than what the market commands, most buyers today are getting mortgages (because interest rates are still so inviting) which means the property will need to be appraised. And if it’s not in line with the market, the property won’t appraise, and the bank won’t approve the loan.
Pricing is somewhat of an art. You don’t want to underprice a home – you want to price it close enough that you are going to get the activity desired on the home. While it’s tempting in this market to overprice to build a nice cushion expecting low-ball offers, the closer you price your home to the actual sales price, the larger the pool of buyers you will find. With a larger pool of buyers, you may even end up with competition for your house!