Zillow'S AVM vs Alex Sung's CMA — Long Island City Home Sales

Thumbnail of Zillow AVM vs Alex Sung's CMA Blog Article





\








When home buyers or sellers first start their market research, the first thing they do is go on Zillow. The problem is that Zillow oftentimes confuses people as to whether their information is current or factual. One of the biggest points of contention is Zillow's pricing method for properties. They use a cloud-information based system of valuating called "Automated Valuation Model" or AVM for short. It is a convenient method, but prone to errors.

Automated Valuation Model

AVMs are very useful tools to find a hassle-free way to instantly get valuations of homes in your neighborhood. They do this by calculating homes similar to yours using similar characteristics such as number of bedrooms or square footage. However, this can come with its own territory of weaknesses.

Weaknesses

Because they employ a simplistic version of home valuating, it can be prone to errors. The first error is that sometimes the homes they compare are too old, too far, not the same type, and are sometimes not even relevant. For instance, if they use a home that was sold more than a year ago, this might skew the average prices for the homes that are being valuated against. 

Another error could be that because nobody knows what the algorithm is of these AVMs, and not just Zillow's, you can never truly gauge how accurate they will be. A reason for using a CMA, instead, is because it is oftenmines more accurate and closer to a real market appraisal than an AVM could be. 

Comparative Market Analysis 

A comparative Market Analysis, or CMA, is a Real Estate Salesperson's opinion of what a home is actually worth. This is very important in accurately forming an opinion about how to price a home for sale, or negotiate a great deal on a home when buying. 

When done correctly, a CMA will employ industry standard techniques in order to price a home as close as possible to what a Real Estate Appraiser would mark it for. Why is this important? Because if a home buyer were to finance a home, the first thing a bank would ask for would be a real estate appraiser to market valuate the homes worth. If a home were to be priced too high, and a buyer were to accept, guess what happens? The bank will only approve it for up to the appraiser's market value opinion and the deal might fall through. 

Weaknesses

A CMA's weakness is only as weak as the strength of a Real Estate Salesperson's skills. The Agent must be knowledgeable in the area, whether that neighborhood is currently in a soft or hard market, and how to use the correct comparisons to accurately forecast the market value. 

Alex Sung's Pricing Skills

My method of pricing homes is accurate and no-frills. I make sure to analyze a property by how unique it is and compare it to other homes that more closely matches its descriptions. I do so in order to make sure that your home gets the most deals as a seller or buyer. This takes a lot of work, but I do so because I am passionate about having you as a client. Everyone has a unique situation, but I make sure that I focuse on effectiveness rather than efficiency. You know where to contact me.  

Zillow'S AVM vs Alex Sung's CMA — Long Island City Home Sales Zillow'S AVM vs Alex Sung's CMA — Long Island City Home Sales Reviewed by Alex Sung on October 26, 2020 Rating: 5

No comments:

Powered by Blogger.