Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Who’s That Knocking On My Door?
Old 02-09-2015, 11:28 AM   #1
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,054
Who’s That Knocking On My Door?

http://youtu.be/Y3WgsKEDg5Q

Turns out in the last month three different real estate agents have cold-called at the house. Seems like there’s a scarcity of homes for sale in the neighborhood. After the third agent left, I went to Zillow and saw that the house’s estimated value was $1.8M. That seems to be a lot of money and I wonder if my buying an air conditioning unit that says “Lennox” on it had, in part, helped to increase the value of the home. I don’t follow real estate and I don’t know much about Zillow (e.g. how accurate are they in their estimates. I’m hoping that they are incredibly accurate).

We don’t plan on selling the house in the next three years, so the house’s value is rather unimportant for the time being (it does make me happy). But, does the value of the house change anything for us as in how we invest (be less conservative)? Can we spend more money, etc. ? Now that I am thinking about it, maybe we should sell house sooner so we can be farther away from the children.



__________________

__________________
Carpe cōleī
redduck is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-09-2015, 11:34 AM   #2
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,528
I just saw this article on Zillow estimates this morning. Take them with a very large grain (lump?) of salt:

Inaccurate Zillow 'Zestimates' a source of conflict over home prices - LA Times

This is just one paragraph from the artilcle:

Quote:
For example, in New York County — Manhattan — the median valuation error rate is 19.9%. In Brooklyn, it's 12.9%. In Somerset County, Md., the rate is an astounding 42%. In some rural counties in California, error rates range as high as 26%. In San Francisco it's 11.6%. With a median home value of $1,000,800 in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $116,093.
__________________

__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 02-09-2015, 11:38 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
I am all over Zillow and can say they tend to be well off the mark most of the time. They also have the random moment when some alien seems to enter the office and plunk absolutely nutty numbers down. If your home numbers have gone from $250k to $1.8M for instance I would blame Zog.

Now if you can find a buyer who thinks 1.8M is a great price and you want to move then go for it - you should be able to buy a replacement at a decent price. The areas I watch seem to have more places for sale and prices drifting downward.

Edit: the chestnut is that all real estate is local, so you are the best judge of the prices in your area rather than this left coast guy.
__________________
calmloki is offline   Reply With Quote
Old 02-09-2015, 11:52 AM   #4
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,054
OK, Walt34 and calmloki, I guess I'll just stay the course. Must say that I'm not quite as happy as I was a little while ago.
__________________
Carpe cōleī
redduck is offline   Reply With Quote
Old 02-09-2015, 11:54 AM   #5
Recycles dryer sheets
 
Join Date: May 2011
Location: Twin Cities
Posts: 434
Zillow does post their own accuracy data - The Zestimate - Find out what a Zestimate is and how it works - Zillow

In a market like LA they are basically off by over 10% in either direction more than 1 out of 3 times. Not very good. As a Realtor it's pretty easy to downplay the usability of a zestimate using zillow's own data.
__________________
Fishingmn is offline   Reply With Quote
Old 02-09-2015, 12:00 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,971
I'm sure it varies a lot but Zillow is WAY off for my condo. Zillow lists the price as 40% higher than what they have been selling for. That's a huge difference. After seeing this, I don't think I would rely on that site for anything.
__________________
aaronc879 is offline   Reply With Quote
Old 02-09-2015, 12:46 PM   #7
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,170
I sold a house in MD four years ago. Zillow had one too few bathrooms and doubled the square footage. I don't know how they get their data but I left it alone. I figured that if they were way off on valuation/sqft in my area, I had deniability of the estimate. I could simply ask buyers if, after the obvious mistakes, they could trust anything at Zillow.
__________________
Tadpole is online now   Reply With Quote
Old 02-09-2015, 01:43 PM   #8
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 1,132
No one knocks on my door, but I get mailers every week offering to buy my two rent houses for cash. So I know that inventory is tight and prices continue to move higher.

In my area, the Zillow estimates look pretty accurate. We're planning to downsize at some point, so I've been carefully monitoring actual sales in the area to get an idea what we should ask... and it's pretty darn close to Zillow. I've been known to go look at houses for sale in the immediate area so that I can see the condition for myself and make necessary adjustments to $/sqft after it's sold.
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.0% SI: 2 pensions, some rental income, SS later
Cobra9777 is offline   Reply With Quote
Old 02-09-2015, 01:57 PM   #9
Thinks s/he gets paid by the post
2017ish's Avatar
 
Join Date: Apr 2012
Posts: 1,846
I know that on our present house (and our previous one, also in fly-over land), Zillow is way off. But, in each case, they were the type of houses that would be difficult for a Zillow-type service to nail. (Past house, "valued" at less than half of what we sold it for; present house, zillow doesn't consider 25 acres to be more valuable than a neighborhood lot)

Really surprised that it is that far off across the board though.
__________________
OMY * 3 2ish Done 7.28.17
2017ish is offline   Reply With Quote
Old 02-09-2015, 04:13 PM   #10
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
Zillow is entirely accurate in my area. OTOH one of the major banks estimates significantly undervalues both my current home and the home I sold. Best person to ask "what is my home worth" is a local realtor.
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 02-09-2015, 05:28 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,813
Quote:
Originally Posted by redduck View Post
http://youtu.be/Y3WgsKEDg5Q

Turns out in the last month three different real estate agents have cold-called at the house. Seems like there’s a scarcity of homes for sale in the neighborhood. After the third agent left, I went to Zillow and saw that the house’s estimated value was $1.8M. That seems to be a lot of money and I wonder if my buying an air conditioning unit that says “Lennox” on it had, in part, helped to increase the value of the home. I don’t follow real estate and I don’t know much about Zillow (e.g. how accurate are they in their estimates. I’m hoping that they are incredibly accurate).

We don’t plan on selling the house in the next three years, so the house’s value is rather unimportant for the time being (it does make me happy). But, does the value of the house change anything for us as in how we invest (be less conservative)? Can we spend more money, etc. ? Now that I am thinking about it, maybe we should sell house sooner so we can be farther away from the children.



Most of the comments so far seem to be about Zillow, rather than about "does this change anything?"

I can't imagine myself owning a $1.8 million house.
If some weird thing happened that suddenly made my location worth a lot more than I thought it was worth, I'd definitely think about moving just to lock in that gain before the market came back down to earth.

If it were something I really believed was permanent, I'd feel like it added to my net worth - I'd feel a little better about my long term care plan (which includes selling the house). I'd say it gives me a little more flexibility if I had been thinking about moving before I discovered this.

But, I'd have trouble just upping consumption spending (like taking an expensive trip) unless I actually sold the house. A bird in the hand etc.


Regarding Zillow. My county assesor's records are online. I could compare actual selling prices in my neighborhood to assessed values, look at my assessed value, and get a rough check on the number. But, that's because my house isn't hard to appraise, it's pretty typical for my neighborhood.
__________________
Independent is offline   Reply With Quote
Old 02-09-2015, 05:40 PM   #12
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,142
If you owned a house assessed at that value in my town, you'd pay around $35,000 annually in property taxes.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 02-09-2015, 05:43 PM   #13
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
No harm in asking a realtor what your house will sell for.
__________________
walkinwood is offline   Reply With Quote
Old 02-09-2015, 05:46 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,599
Quote:
Originally Posted by Independent View Post
Regarding Zillow. My county assesor's records are online. I could compare actual selling prices in my neighborhood to assessed values, look at my assessed value, and get a rough check on the number. But, that's because my house isn't hard to appraise, it's pretty typical for my neighborhood.
But that's the thing -- in a "typical neighborhood" you can make valid estimates. My house OTOH is extremely unusual for the neighborhood. So are my next door neighbors on both sides. All three of us are utterly unlike anything else within quite a few miles (including each other).

So Zillow, Trulia, and the county assessor all have their own values (which vary very, very far from each other) and none of them comes close to what the place would actually sell for (not that I have any interest in selling).
__________________
braumeister is online now   Reply With Quote
Old 02-09-2015, 07:12 PM   #15
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,054
Quote:
Originally Posted by Independent View Post
Most of the comments so far seem to be about Zillow, rather than about "does this change anything?"

I can't imagine myself owning a $1.8 million house.
I can't either. And, from what I'm hearing about Zillow, I probably don't. Anyhow, it certainly doesn't look like the house is worth that much--not nearly that much. Not a bad house at all, but I would expect something a lot more at that price. In truth, if we sold it, it might be a tear-down.

I guess not much is going to change no matter what the house is currently worth.
__________________
Carpe cōleī
redduck is offline   Reply With Quote
Old 02-09-2015, 07:21 PM   #16
Recycles dryer sheets
 
Join Date: May 2014
Location: Yuma AZ
Posts: 270
Years back, we had real estate agents essentially begging to sell our house. Their claims were what I thought were just ridiculous numbers over what we had paid. We were not in "love" with the place, knowing it was not our retirement home, so I told one "go ahead", if you can get that much, do it.


They did.


At the time, it was a very tax-advantaged sale.


We have not regretted it.
__________________
unno2002 is offline   Reply With Quote
Old 02-09-2015, 07:34 PM   #17
Thinks s/he gets paid by the post
Htown Harry's Avatar
 
Join Date: May 2007
Posts: 1,516
Quote:
Originally Posted by redduck View Post
In truth, if we sold it, it might be a tear-down.
In that case, in addition to a realtor you might want to talk to a builder who works in your neighborhood.

Since we moved in back in the 80's, I have lived in a neighborhood with housing stock that has been almost completely been rebuilt. Over the years, I was always comfortable that the County's appraised value on the land was very safe for a "net worth including my home" calculation. Every lot in the neighborhood is the same size. When a builder pays $100,000 for an old house, tears it down and builds a replacement house that sells, then it is easy to validate the lot alone is worth $100,000 +/-.
__________________
No doubt a continuous prosperity, though spendthrift, is preferable to an economy thriftily moral, though lean. Nevertheless, that prosperity would seem more soundly shored if, by a saving grace, more of us had the grace to save.

Life Magazine editorial, 1956
Htown Harry is offline   Reply With Quote
Old 02-09-2015, 07:44 PM   #18
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 103
Op the ac unit model probably is meaningless. More likely supply vs demand issues. What are the bid prices? Are you saying there is no amount that would make you move? The house value making you happy is called the wealth effect. That also makes you feel like spending more. Not sure what your finances are like but what would selling the place for 2m do for your finances? That is the best indicator for what to do. If I were going to net 1m I would sell in an instant.

Sent from my XT1049 using Early Retirement Forum mobile app
__________________
bad_LNIP is offline   Reply With Quote
Old 02-09-2015, 08:45 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 1,048
There really is a scarcity of homes for sale in my Silicon Valley neighborhood (four listings in the entire zip code) but agents knock on doors and tell you they have buyers for your house no matter what the market is like. It's an old listing trick.


Those yellow postcards and "handwritten" letters on lined paper asking to buy your house for cash? Nothing but a bunch of thieves trying to take advantage of you by buying your house well below market value. I get 5 to 10 of those a week from recent graduates of real estate guru programs and they go straight to the recycling bin.
__________________
Another Reader is online now   Reply With Quote
Old 02-09-2015, 09:17 PM   #20
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 345
Quote:
Originally Posted by Another Reader View Post
It's an old listing trick.
Beat me to it.

Three years ago, they were selling cars. 'I would really like to have your trade in, we are short vehicles like yours, and are willing to make a really good deal if you buy something new'.

Two years ago they were selling timeshares.

Last year they were selling variable annuities.

This year, the real estate market is red hot. "I would sure like to make a nice listing commission!"

What's next year? Door to door steak sales?

All that said, I know that when my mom decided to sell her Florida property, she was pleasantly surprised at where the value had gone. While it is possible that the market is hotter than you thought- the only way to find out is to have a reliable real estate person figure out a realistic asking price.
__________________

__________________
Clone is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Door-to-door magazine saleskids WM Other topics 10 02-24-2010 07:58 PM
Door-To-Door Ed Jones "Advisor"?? Goonie Other topics 4 03-17-2007 06:15 PM
Book Report - Millionaire next door cute fuzzy bunny Life after FIRE 72 10-18-2004 07:52 PM
French Doors or Sliding Glass Door? wabmester Other topics 12 01-23-2004 06:28 AM
Good book - The Millionaire Next Door Telly Other topics 18 08-20-2003 04:37 PM

 

 
All times are GMT -6. The time now is 07:47 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.