I work in Texas, which is a non-disclosure state. Because sellers are protected against having to disclose the final sales price of their home, the automated home valuations in my area can vary. While we've all had days when Zestimates set unrealistic client expectations, agents and brokers in non-disclosure states feel that heat more often than not.
SmartZip works to use local mortgage data and transaction prices from sellers who choose to make it public record, and their algorithms "borrow" pricing information from other similar homes nearby. As a result, their estimated home values are much closer than some other big-name companies who offer automated CMAs.
But I'm not here to talk about algorithms, I want to talk about how any agent can convert a client who gets a low automated home valuation.
Here's a recent email I got from a recent respondent in my farm:
This home value is way low for my property. I think you showed it around $1.6mm. You cannot even get a lot for that price now in my neighborhood. The original HCAD appraisal was approximately $2.17mm and I had to present copious data at the hearing to get it reduced to $1.887mm, still well above your estimate. I realize you are not located near here and are probably relying on some algorithms generated from a broad scan of the market but if you want to gain credibility in local high-end neighborhoods, you really need to roll up your sleeves and talk to people in these areas as well as review recent sales prices.
I am not looking to sell my property anytime soon but I just thought I would provide a quick tidbit of advice to you guys as you get this service up and running. I realize how difficult it can be to get new clients.
This could be the kind of marketing response that makes you wonder how you'll ever succeed, but our job is to overcome objections and prove our market expertise.
Here is my verbatim response:
Thanks so much for your detailed follow up. You have hit the nail on the head for homeowners looking for a quick read on their home value. These are computer generated values, just like Zillow, and other sites that offer your home value without ever stepping foot inside. Texas is a non-disclosure state and the only person who can give you a true valuation on your home is someone with the actual sales data to substantiate true market value.
One of our goals when people log into this page is to educate them on the disparity and false knowledge that these online sites feed to the buying public. I just looked at your Zestimate and it's even lower than the automated valuation you received through my site.
I really do appreciate that you see the difference in online home values and reality, and I assure you that I make it my business to review sales numbers in our area to that I can provide an accurate assessment when I get inside a person's front door. I love that I can fight the state and lower my tax bill, but as a real estate agent I face an uphill battle when trying to educate homeowners and home buyers about actual local market values.
Thank you again for the input on our project and please let us know if there is anything we can do to assist you or someone you know in the real estate market.
I can shrink from adversity or rise to overcome it. It's always my choice.