Your Exceptional Life

I had lunch with a dear friend and business associate last week.  He was talking about his own business and he said “My business is completely transparent now.  Everything you want to know about my industry is online.”  In his corner of the world it is all online.  My corner of the world is all online now too.  The difference is accuracy.

We’ll take my home for example.  Realtor.com estimates my home to be worth between $250,000 and $516,000.  That’ narrows it down.  Cyberhomes nailed it.  They say my home is worth exactly $361,746.  I’ve lost $18,513 dollars in value in the last month.  Whew.  Actually they’re estimating that my neighborhood lost over 5% in value last month.  Probably not.  Zillow.com estimates my house to be worth $336,000 with a Value Range: $262,080 – $376,320.  Eppraisal.com gives me an estimate of $429,122.  I like that number better.  Redfin.com informs me that I can save over $7500 by buying a property on line.  So what good am I?

Well, what those online estimators don’t know is that while I paid $501k for this place, the neighborhood was actually selling in the high 5’s, low 6’s.  That’s because I bought the worst house in the neighborhood.  Since then, the real worst house in the neighborhood sold about 8 months ago for $325k.  It needed $100k in work.  The online estimators don’t know that the worst house in the neighborhood had a terribly dirty termite.  Two baths needed to be ripped out completely.   The original construction in 1955 was substandard on that property and the three properties next to it.  I am the fifth house away.  The floor plans are the same but a different builder took over the tract in 1958 and the construction on the rest of the subdivision is superior to those four houses.  Zillow doesn’t know that.  If you saved $7500 buying through Redfin (as they cheerfully tell you when you log on) and spent over $100k on remodeling a substandard home did you really save any money at all?  Cyberhomes doesn’t know that the home I bought needed a ton of work, and that the work has been mostly completed.  They don’t know that this property now sports a new roof.  They don’t know that in June of 2007 when I purchased this property the carpets reeked of pet urine.  And they were 30 years old.  They don’t know that the linoleum in the kitchen had been slapped over the old linoleum and was peeling up.  They don’t know that there were three different colored carpets in all three bedrooms.  All from the 1970’s.  They don’t know that the old carpet was stripped out, the subfloor sanded and sealed to eliminate the pet odor, the kitchen cabinets refinished, the formica replaced with stone, the slate that replaced the double thick linoleum, the sparkling new master bath.  They don’t know about the fresh paint throughout.  They don’t know that the termites were eradicated and the damage repaired.  They don’t even know that the two trees that pushed up against the foundation were removed in June of 2007.  Those trees are still showing up in the aerials on those sites.

The computer models are nice, but at the end of the day, you need a human being on the ground who can tell the difference between a property that looks like a crime scene inside and a property that has been completely remodeled and is sparkling clean, ready to move in.  How much money is really saved saved running from train wreck “bank owned” to train wreck “motivated seller” learning about a market vs. hiring a professional who already knows the market and has seen the train wrecks?