We recently looked at canceled listings and found that sellers who were unsuccessful at selling their houses with flat fee MLS listings in Florida had their houses overpriced by almost $30,000 on average. Some of these sellers even had their houses overpriced by $100,000 or more!
Price is the number one reason why houses do not sell. A house that is priced correctly will sell, regardless of condition or any other factors.
Even if you don’t have access to the MLS, you can use Zillow to run comps for free and find out how much your house is worth. With a little bit of work, you should be able to get a number that is far more accurate than Zillow’s Zestimate or other automated valuations.
How Accurate Is Zillow’s Zestimate? Not Very.
The Zestimate is almost always inaccurate and a lot of times it can be off by a lot. Zillow actually publishes the stats on how accurate the Zestimate is in each market.
In the Orlando area, Zillow estimates that the Zestimate is going to be within 20% of the sale price 87.2% of the time. Now, 87.2% might sound pretty good, but if you think about a $100,000 house, being within 20% of the sale price could mean anywhere from $80,000 to $120,000. That’s a $40,000 price range. You need to price your house more accurately than within 20% of the sale price before you list it on the MLS with a flat fee MLS listing.
The smaller the margin of error, the less often the Zestimate is accurate. In fact, Zillow estimates that in the Orlando area, the Zestimate is within 5% of the sale price only around 44% of the time. This means that there’s a good chance that the Zestimate for your house is going be off by a lot.
We also provide flat fee MLS listings in Tampa, and in that area, the Zestimate is even more inaccurate. Zillow estimates that the Zestimate is within 5% of the sale price only 35% of the time in the Tampa market and within 20% of the sale price only 80% of the time.
You can check the accuracy of the Zestimate in your market by scrolling to the bottom of the Zillow homepage and clicking on Zestimate.
Zillow’s Zestimate should only be used as a starting point. It can be helpful for getting a ballpark idea of the price, but if you want a more exact number you have to do some work and pull comps manually. Luckily, it’s not that hard!
How To Find Out How Much Your House Is Worth By Pulling Comps On Zillow
First of all, what are ‘comps’? Comps are comparable houses that have recently sold. These recently sold, comparable houses are used to estimate the value of your own house.
In this example, we’re going to use a house that we are currently in the process of flipping in Leesburg, FL. It’s a 3 bedroom, 2 bathroom house. It is 1,855 square feet and it was built in 2005. Zillow currently has the Zestimate on this house at $190,000.
Step #1: Determine Your Search Area
The first thing we need to do is narrow down the search area. Ideally, you’ll want to pull comps only from your neighborhood.
You can type in your zip code on Zillow to go to the general location of your neighborhood, and then zoom in to your neighborhood and draw a boundary around your neighborhood so that you are only searching that area.
You really don’t want to look at houses that are outside of your neighborhood because they’re probably not going to be good comps. However, if you’re in the rural area or if you’re not finding anything in your exact neighborhood, you may have to expand your search area. The goal is to search for comps as close to your house as possible.
Step #2: Set Up Search Filters
Now that you have your search area set up, you’re going to want to filter down the results. Here are the basic search filters you’ll want to use:
Search for sold listings only. Houses that are currently for sale are not comps. Houses often sell for much less than list price. We only want to look at houses that have actually sold.
Search for houses with the same number of bedrooms and bathrooms. The best comps will have the same number of bedrooms and bathrooms as your house. Start by setting this filter to “exact match”. If you can’t find enough exact matches, you can always open it up later on. Always start very specific and only open up your search parameters if you’re not finding enough comps.
Search for similar property types. This may seem obvious, but make sure you’re searching for the same property type. If you’re trying to price a single-family house, make sure this filter is set to single-family. You don’t want to compare manufactured homes or condos to single-family houses, or visa versa.
Search for houses with similar square footage and lot size. Ideally, you want to find comps with square footage and lot size within 15%-20% of your house. Be sure to set this filter accordingly. You don’t want to compare a 3,000 sq ft house to a 1,500 square foot house, or a house with 5 acres to a house with 1 acre.
Search for houses that are a similar age. Filter out houses that are too old or too new. You don’t want to compare an older house to a new construction house, and you don’t want to compare a house built in the 1980s to a house built in the 1920s.
Search for recent sales only. When you’re looking for comps, you want to make sure you’re looking at recent data. Limit the search to sales that occurred within the past 6 months only. Houses that sold over 6 months ago are not going to be good comps.
Step #3: Analyze The Results
Once you’ve set up your search filters and start getting results, you’ll want to look at each result individually and determine how similar the house is to your house. You’ll ideally want to be looking at houses that are in similar condition with similar updates and finishes.
Tip: Track Results With Google Sheets Or Excel
Once you start finding good matches, keep track of your results in a Google Sheet or Excel. Note the sale price, square footage, and other important details so you can refer to it later.
You can then use Google Sheets or Excel to find the average sale price, price per square foot, or average price per square foot of the comparable properties. You can really dig in as deep as you want, and it’s helpful to have all of the information in one place.
Tip: Finding Additional Comps
If you’re looking for more comps, you can pull up the listing for your house on Zillow and scroll down to the comparable homes section. Here, Zillow will list houses that it thinks are comparable to yours. You’ll probably see some of the same houses you found manually, but sometimes Zillow displays houses that you weren’t able to find on your own because they were just outside of your search parameters.
Inspect these comps carefully before you use them to make sure that they’re actually good comps. Eliminate the houses that are located in other neighborhoods or that are in vastly different condition. Use your best judgment on these comps and only add them to your list if they are actually comparable to your house.
How The Zestimate Compares To The Comps We Pulled Manually
In the case of our example house, it’s looking like the Zillow comps are indicting a sale price of around $175,000. When we bought this house, we ran comps using the MLS and came up with a sale price of $180,000, so the Zillow comps are pretty accurate.
Now, Zillow is showing a Zestimate of $190,000 for this house, so you can see how far off it can be sometimes. We would be in big trouble if we bought this house to flip based on the Zestimate.
Zillow also gives an estimated sale price range of $181,000 to $202,000 for this house. After running comps for this house, we’re not seeing any evidence that it would ever sell for that much. You really have to look at comps manually and not rely on the Zestimate. Zillow even says that the average sold price in the neighborhood is $179,000, so why is the Zestimate $190,000? You should never rely on the Zestimate to determine how much your house is worth.
Want To List Your House On The MLS For A Flat Fee?
If you have any questions about finding out how much your house is worth, feel free to reach out to us. If you’re interested in a flat fee MLS listing in Florida, we can get your house listed on the local MLS for a flat fee. Just use the form below to get started!
