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Zillow vs Appraiser Part IV

Zillow vs The Coyle Group, Part IV

It’s been a pretty busy 2015 and I really haven’t had much time to blog. However, this is probably my favorite post to write each year. Since 2011, we’ve had a little contest between Zillow and The Coyle Group (see prior years). We randomly select a number of appraisals recently completed by our office and see how our appraisal values match up against Zillow’s Zestimates. This year we chose 16 properties across Philadelphia, Montgomery County, Bucks County, Delaware County and Chester County. Housing styles ranged from Roxborough rows to Center City condos flats to Main Line mansions.

Below is a chart of the results. The first column shows where the property is located, the second The Coyle Group’s appraised value and the third Zillow’s Zestimate. The last column shows how high or low Zillow was relative to our appraised values.

The Coyle Group - Zillow 2015

Once again, the results are pretty astonishing. Now, Zillow was pretty accurate on the Ambler Golf Community home; and the Merion Station Tudor was right on target. I’ll even concede that the Center City Condo was in range as well.  But when Zillow is off, it tends to be way off! For instance, with the Parkwood Row in Northeast Philly, Zillow understated the value by 34.62%. That’s a big miss considering how “data rich” the Northeast is. Also, it just so happens that this property is currently active for $190,000.  Zillow missed that little fact.  This is where having a human being analyze the market data is so important.

Another interesting example is the Wyndmoor Colonial. This property was over valued by more than 22%.  You see, what Zillow didn’t know was that this property was in original condition.  Original kitchen, baths, fixtures, shag carpeting, wallpaper, etc.  It was like stepping back into the 1960’s.  Again, this is where having a certified appraiser physically inspect the property really matters. Algorithms don’t differentiate between “Brady Bunch chic” and a knocked-out kitchen with granite and high-end stainless appliances.

It just so happened that only four of the sample properties were under stated by Zillow.   Granted, is a very small sample but, on average the Zestimates were under the appraised value by 22.98%. This is important to consider. If you are a homeowner selling your property and relied on a Zestimate to price your home, you could potentially under-price your house and leave some serious money on the table.

The other twelve value samples are all over-stated by an average of 8.83%. As a seller, if you over price your home in a competitive market, buyers will pass you by in favor of more competitively priced homes. Eventually, you’ll probably have to lower your price and run the risk of losing buyers that may have otherwise been very interested in your home.

Philadelphia and the surrounding markets are so nuanced that computers and algorithms can’t accurately take into account all of the individual market factors. For instance, things like specific location can’t be accounted for by Zillow. If your home is next to a garbage dump Zillow will look at it the same as if it were next to a park. As pointed out above, Zillow also has trouble factoring condition and updates into their Zestimates, as well. As of right now, there is no technology that beats having a knowledgeable appraiser to determine an accurate value on a property. Granted, the technology is getting better, quickly but it’s still not as reliable.

Don’t get me wrong, Zillow has it’s place. It’s great for gathering information on neighborhoods and general market trends. It’s comparative tools and graphs are very useful.  Zillow is a good place to start.  However, in the end, Zillow’s Zestimates are not appraisals at all and should not be relied on as such. If you need assistance in pricing a property, I suggest getting some input from a from a good local agent or a certified appraiser and passing on Zillow.
The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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Zillow vs The Coyle Group Part III

The Coyle Group vs Zillow Part III

It’s that time again for the annual match up between Zillow and The Coyle Group.  This year we randomly selected 25 appraisals completed by our office with in the past 3 months.  The appraisals were of properties across Philadelphia, Montgomery County, Bucks County, Delaware County and Chester County.  Housing styles ranged from simple South Philly row homes to Center City condos (you’re welcome Mark) to Main Line mansions.

Below is a chart of the results.  The first column shows where the property is located, the second The Coyle Group’s appraised value and the third Zillow’s Zestimate.  The last column shows how high or low Zillow was relative to our appraised values.

Property

 Appraisal

 

 Zillow Zestimate

Difference

Rittenhouse Square Townhse  $    990,000.00    $     954,000.00

3.63%

Chestnut Hill Twin  $    285,000.00    $     329,000.00

15.43%

Ambler Colonial  $    570,000.00    $     396,000.00

54.47%

Burholme Twin  $    125,000.00    $     138,000.00

10.40%

Media Split Level  $    325,000.00    $     251,000.00

29.48%

Mount Airy Twin  $    310,000.00    $     259,000.00

9.69%

Northeast Philly Row  $    171,000.00    $     172,000.00

0.58%

Hatboro Split Level  $    225,000.00    $     244,000.00

8.44%

Gladwyne Colonial  $    600,000.00    $     758,000.00

26.33%

Society Hill Townhouse 1  $    875,000.00    $     848,000.00

3.18%

Conshohocken Single  $    190,000.00    $     252,000.00

32.63%

Flourtown Colonial  $    735,000.00    $     698,000.00

5.30%

West Chester Colonial  $  1,300,000.00    $  1,000,000.00

30.00%

Society Hill Townhouse 2  $  2,100,000.00    $     922,000.00

127.76%

Chestnut Hill Colonial  $    975,000.00    $     857,000.00

13.77%

Bryn Mawr Colonial  $    770,000.00    $     750,000.00

2.67%

Havertown Cape Cod  $    295,000.00    $     286,000.00

3.14%

South Philly Row  $    186,000.00    $     151,000.00

23.17%

Doylestown Colonial  $    395,000.00    $     337,000.00

17.21%

Villanova Tudor  $  1,550,000.00    $  1,430,000.00

8.39%

Roxborough Row  $    240,000.00    $     210,000.00

14.20%

Warrington Colonial  $    435,000.00    $     378,000.00

13.10%

Condo – The Philadelphian  $    675,000.00    $     634,000.00

6.07%

Condo – Queen Village  $    180,000.00    $     183,000.00

1.63%

Lafayette Hill Colonial  $    325,000.00    $     275,000.00

15.38%

 

The results are pretty amazing.  In a few comparisons, Zillow was right on target.  For instance, I would say that they were spot-on with the Northeast Philly Row and the Queen Village Condo.  They were fairly close with number of others including the Rittenhouse Square Townhouse, Society Hill Townhouse 1, the Bryn Mawr Colonial and Havertown Cape.

However, Zillow completely whiffed on a number of others, most notably the Society Hill Townhouse 2.  Zillow wasn’t even close.  The Zestimate missed the mark by more than 127%.  That’s crazy considering there was a recorded sale of this property in 2013 for $1.85M.  This is where having a human being analyze the market data is so crucial.  All the fancy algorithms and computer models overlooked the simple fact that this property sold only months ago for twice the Zestimate amount.  We appraised the property a couple months after the sale and following a renovation of the kitchen and baths.

On average, including the Society Hill 2 property, the Zillow Zestimate was 23.42% lower than the appraised value.  Excluding the Society Hill 2 property, Zillow was still off by 16.47%.  When Zillow over-Zestimated they did so by 11.25%, on average.  These are some significant numbers.  If you were selling and used a Zestimate to potentially under-price your house, you could be leaving huge sums of money on the table.  If you overpriced, the market would likely pass you by in favor of more competitively priced homes.  Eventually, you would have to reduce your price and by that time many of the interested buyers will have moved on.

Philadelphia and the surrounding counties are such a patchwork of real estate markets that computers and algorithms can’t possibly take into account the individual nuances.  Zillow doesn’t take into consideration if there’s a vacant house next to your property or a golf course.  Zillow looks at them as being the same. That’s why having a knowledgeable appraiser to physically inspect the property is so important to realizing a correct value.  Nothing (so far) beats having a live human being appraising your property.

Bottom line, Zillow is not all bad.  It is not an appraisal but it is a good place to start.  The neighborhood data, general sales information, graphs and comparative tools are great and very user-friendly.  However, if you are looking to properly price your home, I would pass Zillow by and get some advice from a good local agent or a certified appraiser.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  If you need a guest speaker at your next sales meeting, please give us a call.  We would welcome to opportunity to speak to your group and field any appraisal related questions you may have.  For more information please visit our website at www.TheCoyleGroupLLC.com  You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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Zillow vs Appraiser 2013

 Zillow vs TCG

“Zillow told me that my home is worth…”

Appraisers across the USA hear those words at least once a week from well-meaning homeowners.  What many homeowners don’t realize is that Zillow, while a very useful tool, is not always the best indicator of the actual value of their home.  A Zillow Zestimate is not an appraisal.  In fact, if homeowners use Zillow to help them price their home for sale, they could be leaving thousands of dollars on the table, as we will show you.

Below is a chart of 18 randomly selected appraisals that The Coyle Group completed in the past 3 months.  The houses are located throughout Philadelphia, Montgomery, Bucks, Delaware and Chester County.  The chart is a comparison of our appraised value and the Zestimates produced by Zillow.  Keep in mind that our appraisals have the benefit of a full property inspection by a human being and nuanced market knowledge.   Zillow’s Zestimates rely on public records, complex algorithms and no physical inspection of the property.  Here are the results: 

Maple Glen Colonial Appraisal: $430,000 Zillow: $351,050

22.48%

Conshohocken Single Appraisal: $370,000 Zillow: $329,924

12.14%

Collegeville Cape Cod Appraisal: $364,000 Zillow: $355,012

8.65%

Bryn Mawr Mansion Appraisal: $2,000,000 Zillow: $1,662,317

20.32%

Lafayette Hill Colonial Appraisal: $550,000 Zillow: $470,806

16.82%

Chestnut Hill Colonial Appraisal: $635,000 Zillow: $686,018

7.44%

Gladwyne Cape Cod Appraisal: $745,000 Zillow: $697,428

6.82%

Condo – The Murano Appraisal: $575,000 Zillow: $458,870

25.30%

Art Museum Condo Appraisal: $280,000 Zillow: $257,852

8.59%

Condo – The Dorchester Appraisal: $345,000 Zillow: $339,499

1.62%

South Philly Row Appraisal: $110,000 Zillow: $157,378

30.10%

Berwyn Colonial 1 Appraisal: $750,000 Zillow: $886,168

15.37%

Berwyn Colonial 2 Appraisal: $1,200,000 Zillow: $1,153,633

4.02%

Doylestown Townhouse Appraisal: $325,000 Zillow: $294,410

10.39%

Fishtown Row Appraisal: $225,000 Zillow: $211,700

6.28%

Villanova Mansion Appraisal: $2,450,000 Zillow: $2,544,935

3.73%

Mount Airy Twin Appraisal: $285,000 Zillow: $324,137

12.07%

Roxborough Row Appraisal: $245,000 Zillow: $235,076

4.22%

As you can see there are some pretty dramatic deviations between Zestimates and the appraisals.  Based on our appraised values Zillow under valued 13 of the properties.  In some instances Zillow was almost right on, take for instance the condo in The Dorchester.  They were only off by 1.62%…that’s pretty good if you ask me.  For the condo at The Murano, they were off by more than 25%…waaaay off!  On average, Zillow under-valued the properties by 12.39%.

In the case of the South Philly row, the Zestimate was over by more than 30%.  However, I can’t fault Zillow on this one.  The property was really dated and needed a great deal of work.  But this does illustrate how having a full interior inspection of a property can lead to more accurate values.  Also, the Mount Airy twin was over-valued by 12%…but this doesn’t surprise me, everyone in Mount Airy thinks their home is worth more than it is.  Just kidding.

Now imagine that you’re a homeowner getting ready to sell.  You hop on your computer, plug-in your address and Zillow says your home is worth $300,000.  Based on our findings, if Zillow under-values properties 12.39% on average, you (the homeowner) could potentially be leaving $37,170 on the table.  That’s serious money!

This illustration underscores the importance of consulting with a knowledgeable real estate agent or Certified Real Estate Appraiser.  Getting a Pre-Listing Appraisal prior to putting your home up for sale and knowing the true market value of your home can save you time, money and effort when it comes to selling. 

As for Zillow, keep in mind that it is a tool…a starting point.  It’s great for neighborhood data, graphs, general sales information or for seeing what your new neighbors paid for their house.  It’s probably not the best place if you’re looking for assistance with making definitive decision or properly pricing your home for sale.

If you want to know more about our Pre-Listing Appraisal services or have any real estate appraisal related questions please visit www.TheCoyleGroupLLC.com.  You may contact us directly at…215.836.5500 or appraisals@coyleappraisals.com

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Zillow vs Appraiser

It seems that Zillow is every nervous homeowner’s best friend (and in some cases their worst enemy). Hardly a week goes by that I don’t hear “Zillow told me my home is worth (fill in the blank).” 

The Zestimates that homeowners often present to appraisers can produce some interesting (and misleading) results.  So much so, that I thought we could do a comparison of 12 randomly selected appraisals that were completed by our office and match them up against their Zillow Zestimates.  Keep in mind that the appraisals have the benefit of a full property inspection by a human being.   Zillow uses public records and complex algorithms.  Here are the results. 

Lafayette Hill house Appraisal: $600,000 Zillow: $529,000

(-11.83%)

Oreland house Appraisal: $230,000 Zillow: $209,500

(-9.78%)

Gladwyne house Appraisal: $585,000 Zillow: $633,500

7.66%

Roxboro twin Appraisal: $206,000 Zillow: $186,300

(-10.57%)

Conshohocken house Appraisal: $350,000 Zillow: $279,600

(-25.17%)

Blue Bell house Appraisal: $335,000 Zillow: $314,900

(-6.38%)

Chestnut Hill twin Appraisal: $300,000 Zillow: $334,200

10.23%

East Falls twin Appraisal: $411,000 Zillow: $427,100

3.77%

Center City condo Appraisal: $755,000 Zillow: $634,200

(-19.05%)

Penn Valley house Appraisal: $585,000 Zillow: $561,000

(-4.28%)

Rittenhouse Square townhouse Appraisal: $1,900,000 Zillow: $898,700

(-111.4%)

Chester Springs home Appraisal: $1,000,000 Zillow: $871,700

(-14.72%)

As you can see there are some pretty significant deviations between the appraised value and the Zillow Zestimate.  In one case, Zillow was off by more than 111% (this seems like a fluke) but, in other examples as close as 3.77% (not bad!).

Bottom line, Zillow is a tool…a starting point.  It’s wonderful for neighborhood data, graphs and general sales information.  It’s probably not the best place if you’re looking for assistance with making definitive decision.

If you have any real estate appraisal related questions, please feel free to contact us…215.836.5500 or appraisals@coyleappraisals.com

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Why is an appraisal needed during Bankruptcy?

During bankruptcy the debtor (the person or entity defaulting) is required by the court to demonstrate the worth of their assets.  Since the debtor’s real estate holdings are, oftentimes, their largest asset a real estate appraisal is required.  In Pennsylvania, a bankruptcy appraisal by a State Certified Real Estate Appraiser is the official means of verifying the true value of the debtor’s property holdings.  In New Jersey, the appraiser must be either Licensed or Certified by the State.  The appraiser is an impartial professional who is qualified to analyze the property and provide a credible opinion as the value of the real estate assets. 

Selection of the appraiser can be made by the debtor or by the debtor’s attorney.  Regardless of who engages the appraiser, it is important to be sure that the appraiser has prior experience performing bankruptcy appraisals.  Not all appraisers have the knowledge or expertise needed to competently provide these valuations.  Also, it is also beneficial to find an appraiser who is comfortable testifying before a court, if necessary. 

Just as important as selecting the right appraiser is selecting the right appraisal format.  As with many things, you get what you pay for.  Appraisals are no different.  They come in many different shapes, sizes and price points. 

There are Automated Valuation Models (AMV) and websites like Zillow that will provide you with a low cost or no-cost valuation of a property, no appraiser needed.  They are usually less accurate and will likely not stand up in court.  Thus, you get what you paid for. 

Then, there are Desktop and Drive-By Appraisals provided by Certified/Licensed Appraisers.  These are limited scope reports that are more affordable; however, they lack the detailed reporting of full appraisals.  The may also not be the strongest performers in a court situation.

Lastly, there is a Full Appraisal, either on an appropriate form or in a narrative format, completed by a duly Certified/Licensed Appraiser.  In court, a full appraisal from a reputable, qualified appraiser will demonstrate the value of the property in the most credible manner.  It may cost a little more but, it could prove invaluable during the bankruptcy proceedings.

At The Coyle Group, our appraisers work regularly with home owners and attorneys during the bankruptcy process.  We understand that bankruptcy is often an emotionally trying time.  Our appraisers are acutely aware of the unique needs and the time sensitivity of the situation, and strive to make the appraisal process to go as smooth as possible for those involved. 

Should you have any questions about our Bankruptcy appraisal services or valuation in general, please feel free to call or email us, 215.836.5500 or appraisals@coyleappraisals.com

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Bucks & Chester County Tax Appeal Deadlines Approaching

The deadline for filing a tax assessment appeal in Bucks and Chester Counties is quickly approaching.  August 1, 2011 is the final day that assessment appeals can be filed with the Assessors Office for Bucks and Chester County. 

So, if you are thinking about filing an appeal, now is the time to act.  You will need to fill out a appeal application and submit it to the assessor’s office along with the appropriate filing fee.  In Bucks and Chester Counties the filing fee for a residential property is $25.

In an assessment appeal the burden of proof is on the property owner.  If you are going to represent yourself, you will need all the documentation necessary to support your case.  You should bring pictures of your property, including any damage or detracting features.  You should have information on comparable sales in your neighborhood.  You can get this from the public records, from a real estate agent of from websites like Zillow.  However, I would not recommend Zillow since the values the site produces can be grossly inaccurate. 

Having a current appraisal of your home completed by a certified real estate appraiser specifically for the purpose of the tax appeal is probably your best alternative.  An appraisal completed for any other purpose such as a refinance could be rejected by the Board at the hearing.  The cost of the appraisal can easily be offset by the savings from a successful appeal.  Some appraisers will even attend the hearing with you (sometimes for a fee) so that they can answer any questions the Board of Assessment may have about the appraisal while hearing your case.  Remember, appraisers cannot advocate for you.  You will have to be your own advocate.  The appraiser can; however, answer questions about the appraisal done on your property.

If you elect to have someone represent you at your hearing (either a professional tax appeal firm or an attorney), they will take care of the application process, obtaining an appraisal and representing you at the appeal hearing.  In some cases, this can really work in your favor.  These professionals know the system and can advocate on your behalf.   We work with a number of tax appeal firms and would gladly provide recommendations if you need one.

If you are not sure whether or not you have a case for an appeal, please feel free to contact one of the appraisers at our office.  We will take a look at your situation and give you an indication as to whether an appeal would be worth your while. 

But hurry…time is running out!

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