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Home Value

APR in the News

What features add the most value to a home?

March 9, 2015
Agents Sound Off
 

Lance Fulford
San Francisco
415.793.6140
lfulford@apr.com

Question: What features add the most value to a home?
Answer: Value — like beauty — is in the eye of the beholder, and in my 20-plus years of experience as a local Realtor, there are multiple differences between buyers in San Francisco and the rest of the Bay Area.
Across the board, however, I would rank a garage as the most valued. This is followed by outdoor space (patio, deck or gardens) and a remodeled kitchen and baths.
Many buyers will forgo remodeled features if they can get a “better” location or one that they put higher value on for their life stage and/or lifestyle.
Then we get into floor plan and functionality, and finer points such as hardwood flooring, moldings and other details including energy upgrades.
Buyers don’t put a value on structural items like foundation or a heating system because they expect those will be there and take that as a given. However, if structural items are an issue or are missing, most buyers will eliminate the property from their list altogether.
Read more opinions of SFGate.

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Buyer / Seller Information

The Value of A Zestimate

October 21, 2013

Author: Rainy Hake, Executive Vice President, Alain Pinel Realtors

Chances are, regardless of whether you are thinking of selling your home or not, at some point you have looked at your home’s Zestimate – the estimated market value of your home on Zillow.com. You probably have even peeked at a few of your neighbors’ Zestimates too. For some, checking their Zestimate becomes a part of their regular assessment of their net worth – watching it fluctuate with the market. But for how highly people regard them, what do they really know about their accuracy? Did you know that in San Mateo County, a home’s Zestimate is within 10% of the sale price only 38% of the time? Let’s look at why.
Zestimates, now available on over 110 million homes, are home valuations that are computed using an unknown algorithm. According to Zillow, a number of factors go into determining the estimate, including physical attributes (lot size, square footage, number of bedrooms, bathrooms, etc.), prior tax assessments, and prior and current transactions of nearby comparable homes. The dollar price is calculated three times a week and Zillow will even show you a chart comparing a property’s Zestimate history with that of your city and zip code.
However, valuing a home is never as simple as applying a formula. An algorithm never looks at your actual home, so it does not factor in major components that can greatly affect your property’s value. For instance, Zillow’s algorithm does not know the actual condition of your home. While some homes are meticulously cared for, many homes are significantly more worn. And while Zillow knows the geo-location of your home it may not have the ability to give weight to the positive attributes of this location. Some aspects, such as the views or the grade of the lot, are likely to be missed. Have you done significant improvements on your house? It’s likely these are not reflected in the Zillow data either.
This problem is even more pronounced in high-end properties. Some of the most luxury items cannot be appropriately valued without inspection – whether it is the imported tile work, the technologically advanced smart appliances, the hand-crafted finishes, the salt water pool, the state-of-the-art landscaping or the impressive views. These can dramatically alter the value of high-end homes and all are missed by a Zestimate.
So truly, how accurate is a Zestimate? Zillow actually has data about their reliability if you dive into their site. So let us take a look at how accurate Zestimates have historically been in our area:

In all three of these counties, for the majority of homes with Zestimates, they do not get within 10% of the final sales price. For San Mateo and San Francisco counties, they get less than 3 out of 4 within 20% of the final sales price. When looking at luxury homes, the difference between $2 million and $2.4 million is very significant – and yet, this is the error range that Zestimates operate within.
That is why if you really are thinking of selling your home, or just want to know the estimated market value of your home, it is essential to work with a REALTOR®. They will do an extensive comparative market analysis to help determine fair market value. In addition to knowing the local market, keeping on top of recent transactions, and having toured many of latest homes on the market, a REALTOR® can inspect many of the intricacies of your home. So, while it may be fun to feed your curiosity and track your Zestimate – at best, you are only getting a very rough estimate of your home’s worth.

This article recently ran in the October 18th, 2013 Palo Alto Daily News publication Premier Homes, pg 10.


About Author:

Rainy Hake currently serves as the Executive Vice President of Alain Pinel Realtors where she plays a role in managing the strategic direction of the company, and also oversees the Marketing, Technology, Training and Strategy departments. She has over 15 years of experience in the real estate industry and holds and MBA from the University of Oxford.
Buyer / Seller Information

Does Size Matter?

September 4, 2013

Author: Bill Lewis, Vice President and Manager of Alain Pinel Realtors Los Altos

Have you ever wondered how big your house is? For many, size matters – and can often be a point of distinction when evaluating a property for purchase. Yet for something important, there seems to be a lot of questions – and questions can lead to conflict. Naturally, when buyers find out their recently purchased home is smaller than they believed, they want to be reimbursed for the difference. I recently saw a buyer who was seeking over $100,000 from the seller! However, it is often not that straightforward and only through continued education will these situations be reduced.
So who determines size and how is it measured? When a property is listed on the MLS, the square footage is auto-populated from the county records. These records are often inaccurate – as changes during construction or remodels have altered square footage without the record necessarily being updated. Yet, because they are the only official record for reference, they are often used in advertising (with a caveat about their validity and that any conflicting information and their sources will be disclosed by the seller). Other home measurements may originate from sellers, the original builder’s plans, the architect of a remodel, an appraiser when a property was refinanced, etc. The fact is that there may be many conflicting measurements from many sources. The most commonly accepted source is from the appraiser, a licensed professional who is trained to determine value, and is the sole source in determining the value of the property for the lender.
Many people often use square footage as the only criteria to establishing value when purchasing a property. Price per square foot is a common measurement used when looking at comparable properties and their selling price. However, there are many other factors that determine value, especially at the high-end. The quality of the interior finishes, the desirable lot, the appealing floor plan, the location and school district are just a few of the factors that also affect value. Many people’s criteria for determining value may differ and may be more subjective. For sellers, when determining a listing price, a knowledgeable agent is crucial as they have toured all recently sold properties and have a better reference about the pros and cons of comparable properties beyond size.
When buying a home, sometimes disclosures and warnings about potential discrepancies are not thoroughly read or understood by buyers as they get lost in the purchase contract. If a buyer finds out their home is smaller than advertised – is it then “worth” less? Not necessarily. In the example in which the buyer sought $100,000 dollars – the advertised square footage was based on the original architect’s plans. During construction, some changes were made that reduced the square footage and was not reflected in the listing. When they sought compensation from the seller, the appraisal for their loan actually incorporated the lesser square footage and found the property was valued accordingly – thus eliminating any claims that the property was worth less. An appraiser will always do his or her own assessment on square footage and not just go off the advertised size.
An experienced agent can and should ensure that a buyer understand that discrepancies may occur regarding square footage, go over all disclosures, and set realistic expectations regarding size. There are many reasons we are drawn to homes – sometimes emotional and often unquantifiable reasons. In the unfortunate event there is a surprise regarding size, it is important to remember that size is not everything – it still is the house that you paid for.

This article is featured in the August 23rd, 2013 Palo Alto Daily News publication Premier Homes Page 10.


About Author:

Bill Lewis currently serves as Vice President and Manager of the Alain Pinel Realtors Los Altos which has consistently been one of the top producing offices within the company. Bill has over 24 years leading and managing real estate offices in the luxury and upper-end “Mid Peninsula” market. For more information call Alain Pinel Realtors Los Altos at 650-703-1602 or email at blewis@apr.com.
 

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