Only a Million Dollars Off!– Home Valuation Sites Compared

Tuesday, March 04, 2008

Like any homeowner, I care what my house is worth.  Even if I don’t plan to sell, I always want to believe that somebody would pay lots of money for it if I did.  A bigger number gives me piece of mind and frankly, makes me feel cool.  Yet, with all the bad real estate news of late, even as a Realtor, I have been less sure about what it’s worth. 

So I decided to check out my Larkspur, California home on those online home valuation websites.

The valuation sites I used were RealEstateABC, Zillow, Cyberhomes, and Eppraisal.  Here is what they said my house was worth:

RealEstateABC - $1,950,000
Zillow - $2,081,000
Cyberhomes - $1,041,411
Eppraisal - $1,726,963

Now I am more confused than ever!  Cyberhomes and Zillow and two of the most highly used online home value estimators. So how can they be $1,039,589 apart on the same exact same house on the exact same day?  That’s a 100% disagreement between the two.  Even a difference 10-20% really makes planning your life or feeling cool pretty difficult.

Apparently, I am not the only person to run into this problem.  Zillow got in trouble with the Arizona Board of Appraisal for their approach.  In all fairness, all these site state in one way or another that they should only be used as a starting point in valuing a home.  Besides, their real goal is not accuracy but rather to get visitors to their sites in order to sell advertising.

So what if you are actually planning on selling or buying a home? Can these sites help?  The answer depends on where you live.  The more similar the homes in your area, the closer these sites should be to reality.  What they all miss are things like: views, property condition, lot usability, neighbors, sex appeal, etc.  Nothing is more important in selling a home than setting the right asking price.  The local market knowledge that an experienced and smart real estate agent provides is critical in helping decide how much to ask or how much to pay for a house.  For the more self-service type, use a tool like CleanOffer to track current listings and get true sold prices.

So how would I rank order the above valuation sites for accuracy this week?

1. Zillow
2. RealEstateABC
3. Eppraisal
4. Cyberhomes

Like all homeowners I like whoever thinks my home is worth the most!

CleanOffer’s Agent-Client Relationship Statement Survey Results

Tuesday, February 26, 2008

As Director of Sales at CleanOffer, I am always soliciting feedback from our users. A common concern from agents is the “Agent-Client Relationship” statement that a client must accept in order to register.  Unlike lead-generating public websites, CleanOffer was designed for the serious buyer, and from what we’ve seen virtually all serious home buyers want to work with an agent. We believe that the statement is important, but we still wanted to address the valid concerns of some of our members, so we conducted a survey last November to determine if we needed to make any changes.

With 46% of the agents surveyed responding, 52% said we should keep it as is, 30% said we should make it optional (i.e. let the agent choose whether to require it),  and only 18% said we should eliminate it completely.

This issue is a hot topic that produces an emotional response. From the comments we received, the majority who want to keep it strongly feel a commitment from clients is reasonable: after all they are paying to provide the service to their clients for free and real estate is what they do for a living. Requiring clients to at least say they are intending to work with them doesn’t seem too much to ask. The biggest reason why some agents want it optional (or want it removed) is because they worry about the reaction of prospective clients to the statement.

From the clients’ side, we often get questions like “what is it for?” and “does this bind me legally?”. The statement benefits clients too, in that it is one of the arguments we use to persuade the MLS’s to allow clients who use CleanOffer to search all the listings on the MLS - by using the agent-client relationship statement to show the MLS that clients on CleanOffer are definitely working with an MLS member agent.  While the statement is not legally binding, in agreeing to it most clients are being honest that they are working with that agent, and that in turn means that the agents can devote time and money to helping these clients with added confidence that a transaction will likely result. That’s good for the clients too.

We would like some feedback from agents that use it effectively to help your fellow agents:

      1.  How do you present it?

      2.  Do you have to explain it, or are clients generally willing to accept the agreement in exchange for agent level access to the MLS?

      3.  Any advice to agents having trouble getting clients to agree?

We’d also love to get feedback from any clients reading this post about their perception of the statement when they signed up.

We do believe the Agent-Client relationship statement has value and our survey seems to show that a majority of the agents agree.

What if your computer was stolen?

Wednesday, February 20, 2008

Last week mine was.

I had just finished a meeting with my team at our offices on the 16th floor in downtown San Francisco. Upon entering my personal office directly across the hall, I immediately noticed my notebook computer was not in its docking station.  Plus, where was my computer bag (with my car keys or other stuff in it)?  Amazing…11am in the morning in a high-rise with people directly across the hall and somebody had the chutzpah to walk into an office and steal a computer!

The replacement cost of my stuff was one thing but what about all my years of stored work?  My emails?  My documents? My pictures?  (No CleanOffer customer information was stored on there.  We keep that data at a high security, backed-up, co-location server facility). 

Having your personal computer stolen is certainly a violation of personal space and a major hassle. But it could have been much worse.  Luckily, my great engineers at CleanOffer taught me some excellent data habits over the years. (Unfortunately, the one about locking my office door did not sink in!).  After buying a new computer, thanks to these habits I was restored and back in business in relatively short order. 

Important Computer Data Habits:

• Password protect your computer.
• Back-up all your important documents, favorites and pictures on a regular basis.  This can be easily done with a portable USB drive ($100) or an online back-up service.  Use an automated system so you don’t have to remember.
• Use IMAP email.  By doing so, all your current and past emails including folders, addresses and attachments are available instantly from any computer. 
• Keep your software installation disks in one spot.
• Have some sort of PDA for your contacts and appointments.  This way you still have this information even if your computer is gone.  You can restore it all back to your new computer from the PDA.

So what about the bad guy doing something evil with all my information?  Of course I changed all my financially related online passwords right away.  Plus, since my computer itself was password protected, it is not likely that the bad guy could access my files anyway.  My engineers told me that in the vast majority of cases the thief simply erases your hard-drive and sells your computer on Craigslist.

Ah ha…so maybe I could find my computer on Craigslist and catch the guy!  I searched Craigslist just to see and the the first advertisement for a Thinkpad T60 read:

“IBM Thinkpad T60 for sale.  This is a steal!”    Hummmmm.

Click-throughs are not “Leads”

Tuesday, February 12, 2008

I was going to write a summary about the ineffectiveness of all the so called online “lead” generators but I think Dan Green of TheMortgageReports.com says it as well as anybody in his post, In The Business Of Personal Relationships .

After all, Real Estate is a Relationship Game.  Besides, does anybody really want to be somebody’s Lead?

Minor Update Tonight

Friday, February 01, 2008

We will be releasing a small update tonight to correct a problem with open house information for REIL listings. As part of the update, we are also bundling in two minor changes: Google Analytics integration and CleanOffer Blog links inside the application. Please see the release notes for detailed information about the update. The scope of this update is limited, but you may be pleased to know that we are working on a larger release scheduled for the beginning of April. As we get closer to the release date, we will post articles here to preview the upcoming features.

In keeping with the spirit of CleanOffer's New Year's resolution, over the next few months the engineering team will be blogging on a variety of topics to keep the CleanOffer community informed about the product. Subscribe to our feed or check our blog regularly to find:

• CleanOffer product announcements.
• Previews of upcoming features.
• Demonstrations of lesser known CleanOffer features.

Release Notes

REIL Open House Information

There was an error in the way we were downloading open house information for REIL. This caused missing and/or incorrect open house information for REIL listings. We've corrected the problem and REIL users should now receive correct open house information. This issue is limited to REIL, users in other MLSes are not affected by this problem.

Google Analytics

In order to better track the usage of the CleanOffer application, we've integrated the Google Analytics service. This will allow us to better understand how our users navigate through the application so that we can improve the user experience.

Blog Links

We've added links to the CleanOffer blog to the bottom of every page of the application.

Smart Home Buying

Thursday, January 31, 2008

As a Stanford Business School Alumnus and a Real Estate Broker, over the years Stanford invited me to give seminars to the graduating students on home buying strategies.  After all, many of the Stanford Graduate School of Business graduates land high paying jobs and are anxious to buy their first home.

These students are trained to think analytically and like checklists.  So do I.  This summary is pulled from my seminar archives on “Smart Home Buying”. 

Don’t

• Buy without a really good real estate agent
• Ask everybody for his or her opinion
• Buy during hot markets (i.e. spring)
• Get involved in crazy multiple offers
• Buy a home with foundation problems
• Buy a home with “major unfixable negatives”
• Do significant remodeling while living there
• Over analyze
• Think of your home as just an investment
• Expect perfection

Do

• Use a really good local real estate agent
• Have your cash and loan approval in place
• Go online to educate yourself
• Go to open houses to educate yourself
• Buy properties that have been on the market for a long time
• Buy when others aren’t
• “Go for it” if a home “comes close” to your needs
• Buy the best location you can afford
• Have thorough inspections
• Multiply remodeling cost estimates by 1.5X
• Multiply remodeling time estimates by 2X
• Plan on a minimum of 3-5 years for net profit

Where Do Real Home Buyers Come From?

Friday, January 25, 2008

As CEO of CleanOffer.com I need to know what’s going on out there in the big, bad world of online real estate.  In addition to my CleanOffer duties, I remain an active real estate broker selling homes locally.  This keeps me current with the market and helps me better understand what works about the CleanOffer product and what needs improvement.  Plus, closing an escrow does pay nicely.

Being immersed in both the online and off line real estate game gives me an interesting perspective and keeps me asking questions like:  “How has the web changed the agent-client relationship and where do real home buyers (the ones who actually buy homes) come from today?”  (How Do Consumers Choose an Agent?) 

We all know that buyers are increasingly searching for homes online.  In fact, the National Association of Realtors now says that over 80% of them use the Internet as part of their home search.  It seems logical then that with access to all this information, buyers would be less likely to use a real estate agent. 

In fact it is just the opposite. Over the past 10 years, as buyers radically increased their use of the Internet in their home search, they also increased their use of real estate agents to complete the purchase transaction.  Why?  While empowering, all this online information only increases a buyer’s need to have a local agent to help interpret it.  Homes are not commodities.

So if increasing Internet use amplifies a buyer’s need for agent representation, then the next logical question is:  “Are real buyers finding their agent online”?  As pointed out in Buyers, Sellers: Realty Agents Rule, the answer is NO. In fact only 5% of the buyers who closed escrow on a home last year found their agent online!

Real estate is a relationship game. Buying a home is simply too significant of a transaction for most people to be comfortable working with an agent they don’t know or weren’t referred to by somebody they trust.  When I got Lasik eye surgery several years ago, I did lots of research on the Internet first.  However, the doctor I chose for the procedure came from a personal referral.  Those advertisements for, “Buy one eye and get the second one free” just didn’t feel right to me.  Likewise, most home buyers are not persuaded by the picture of an agent or taglines such as,  “Top Producer Who Cares”. 

It’s still who you know.  I guess some things never change.

New CleanOffer Blog Launched!

Wednesday, January 16, 2008

Most of us make New Years resolutions. Include me in that list. One of our resolutions this year at CleanOffer is to communicate better and be more transparent with the agents, homebuyers, and homesellers who use CleanOffer. As pointed out in Inman News, people expect a “New World Transparency” in real estate.

The web is awash in online real estate sites. The vast majority of these are designed to be so called “lead-generators” for agents and brokers. CleanOffer is different. We seek to assist the collaboration between agents and their clients with the goal of helping them complete smooth and intelligent real estate transactions.

CleanOffer is run by experienced real estate brokers and active home owners. Our rich real-life, real estate experience is what guides us in creating what we do with CleanOffer. Yet, most of our users know little about us and virtually nothing about how we think about real estate. Hence, this new blog is dedicated to:

• Transparency in what we do over here at CleanOffer and why we do it
• Sharing with you our news and our plans
• Soliciting your experience, feedback and ideas
• Discussing real estate industry trends
• Talking about other cool stuff

We think that we do a pretty good job here. Still, we know that not everybody is happy with everything we do. Good or bad, we want your input to this blog. You will be helping your local real estate community. Stay tuned for more…

Here is to a very happy, healthy and prosperous 2008!

David Faudman, CEO/Founder
CleanOffer, Inc.