By David Dorman, Broker Associate, CENTURY 21 Carioti
Let me ask you something. Have you ever gone on Zillow or Realtor.com, typed in your home address, and checked what your house is supposedly worth?
Of course you have! And if you’re like most homeowners, you’ve probably had one of two reactions. Either you’re thrilled because the number is higher than you expected, or you’re scratching your head wondering how they came up with something so low.
Here’s the problem. That number isn’t necessarily what your home is worth. It’s what a computer thinks your home might be worth.
And there’s a pretty big difference.
Now, before anyone thinks I’m attacking Zillow or Realtor.com, I’m not. These websites provide a valuable service, and sometimes their estimates are remarkably accurate. I’ve seen estimates that were almost right on the money.
But I’ve also seen them miss the mark by tens of thousands of dollars, sometimes more. And those mistakes can go in either direction.
That’s why I believe there’s still no substitute for what I like to call a human CMA.
Even Zillow’s Own CEO Learned This Lesson
Here’s a story that I think perfectly illustrates my point.
Back in 2016, Spencer Rascoff, who was Zillow’s CEO at the time, sold his Seattle home for $1.05 million.
The day after the sale, Zillow’s own Zestimate placed the property’s value at approximately $1.75 million.
That’s a difference of $700,000!
In other words, the home sold for approximately 40% less than Zillow’s estimate displayed immediately after the sale.
Now, to be fair, this was an unusually large discrepancy, and the estimate was recorded after the transaction rather than necessarily representing the estimate when the home was originally listed.
But here’s what’s interesting. Part of the problem was that the property sat on an unusually shaped lot along a busy road. Those were factors that the computer wasn’t properly accounting for when comparing it to other properties.
Think about that for a moment. If an automated system could miss something that significant on a home owned by the person running the company, imagine what it might miss about your property.
And that’s exactly my point.
An Algorithm Doesn’t Know Your Home Like You Do
Automated home valuations rely on algorithms. They analyze public records, recent sales, square footage, bedroom counts, lot sizes, and whatever other information they can access.
That’s useful information, but it doesn’t always tell the whole story.
Let’s say three homes sold in your neighborhood recently.
One sold for $475,000. Another sold for $525,000. And the third sold for $550,000.
A computer can recognize those sales and use them to estimate the value of your home.
But what if the $475,000 property was a distressed sale? What if the $525,000 property needed a new roof and significant updating? And what if the $550,000 home had a spectacular renovation, an oversized lot, and a beautiful water view?
Those details matter.
Now, to be fair, today’s algorithms are getting better at recognizing some of these differences. But they’re still working with whatever information is available to them, and that information isn’t always complete or accurate.
A computer can analyze data. A knowledgeable real estate agent can analyze the circumstances behind that data.
And sometimes those circumstances make all the difference in the world.
Why I Prefer a Human CMA
A CMA, or Comparative Market Analysis, is how real estate professionals evaluate a property’s likely market value by comparing it with other properties.
I’ve been doing these for more than 26 years, and my approach has changed considerably over that time.
Years ago, I would show up at a seller’s home with stacks of paperwork, printed comparable sales, elaborate presentations, and all sorts of information.
And then something interesting would happen.
I’d sit down with the homeowner, start talking, and realize that some of my assumptions needed to change.
Maybe the homeowner had made improvements I didn’t know about. Maybe there was something unique about the property that wasn’t reflected in the public records. Or maybe they knew something about a recent neighborhood sale that helped explain why it sold for a particular price.
Suddenly, that beautiful presentation I’d spent hours preparing needed adjustments.
That’s when I started realizing that the most important part of a CMA isn’t necessarily the paperwork.
It’s the conversation.
Today, I can sit down with a homeowner, review the market information, discuss the property, and make adjustments as we go.
I have access to the data and tools I need, but I also have something a computer doesn’t have: decades of experience evaluating properties and understanding how buyers respond to them.
And just as importantly, I have the homeowner sitting across from me.
You Know Things About Your Neighborhood That I Might Not
This is something I think a lot of agents overlook.
Homeowners can be an incredible source of information.
You might know why the house down the street sold for less than expected. You might know that another property had significant problems that weren’t obvious in the listing. You might even know about improvements, neighborhood conditions, or other circumstances that wouldn’t show up in an online search.
Now, that doesn’t automatically mean those things change your home’s value. We still need to evaluate how the market responds to them.
But shouldn’t your agent at least be willing to listen?
I certainly think so.
I don’t believe a CMA should be an agent walking into your home, announcing a number, and expecting you to accept it without discussion.
It should be a collaborative process where we examine the facts, discuss the property, and arrive at a realistic assessment of what buyers might be willing to pay.
Even My Own Home Valuation Tools Aren’t Perfect
I use a program called Homebot that allows homeowners to monitor their estimated property values, track equity, and keep an eye on what’s happening in their local real estate market.
It’s a great tool, and I’m happy to provide access to anyone who wants it.
But here’s something I always explain: It’s an estimate, not a promise.
I actually had a situation where a client’s automated home valuation came in higher than they expected.
You’d think that would be good news, right?
Unfortunately, when we later discussed the property’s realistic market value, the client felt as though I was pulling a bait-and-switch.
And I understood why they might feel that way.
But the reality was that the automated system had generated its own estimate. It wasn’t a number I had personally determined, and it certainly wasn’t a price I had promised the home would sell for.
That’s one of the challenges with these systems. They can create expectations that aren’t always supported by the actual market.
And sometimes they underestimate a home, which can be just as problematic.
Imagine making a decision about selling your property based on an estimate that’s $40,000 or $50,000 below what a knowledgeable buyer might actually be willing to pay.
That’s why I always encourage homeowners to use these tools for what they are: a starting point.
Don’t Hire an Agent Who Just Tells You What You Want to Hear
Now, I want to make something very clear.
Just because you believe your home is worth $600,000 doesn’t necessarily mean it is.
And if the market data supports $550,000, a good agent needs to be willing to have that conversation with you.
But the reverse is also true.
If an agent walks into your home determined to price it aggressively low just to generate a quick sale, without taking the time to understand the property or listen to your concerns, that’s a problem too.
I’ve never believed in the turn-and-burn approach to real estate.
My job isn’t simply to get a sign in your yard, put your home in the MLS, and hope for a quick commission.
My job is to help you understand your options, evaluate the market, and develop a strategy that protects your interests.
Sometimes that means explaining why a homeowner’s expectations are too high. Other times, it means recognizing value that isn’t immediately obvious in the comparable sales.
And occasionally, it means telling someone that now might not be the best time to sell at all.
That’s what experience is supposed to bring to the table.
So, What’s Your Home Really Worth?
The answer is that your home is ultimately worth what a qualified, willing buyer is prepared to pay under current market conditions.
But determining a reasonable asking price requires more than typing an address into a website.
It takes research, experience, local market knowledge, and perhaps most importantly, a willingness to listen.
If you own a home in Ocoee, Winter Garden, Windermere, Clermont, Orlando, or anywhere throughout Central Florida, and you’ve been wondering what your property might actually sell for, I’d be happy to sit down with you and take a look.
No pressure. No obligation. And no elaborate sales pitch.
Just an experienced real estate professional, real market information, and an honest conversation about your property.
You might be pleasantly surprised by what we discover. Or you might find that the online estimate was pretty accurate after all.
Either way, wouldn’t you rather know?
David Dorman
Broker Associate | CENTURY 21 Carioti
407-948-8295
www.DavidDorman.com
When you hire David Dorman you GET David Dorman.