Getting Rid of Zillow’s “Zestimate”

I am sure by now we have all been to the Zillow home search website and while browsing around you may have noticed under the actual purchase price of the home is Zillow’s estimate of the actual value of the property. Now this may seem fantastic if your dream home is actually overpriced according to this “zestimate.” The problem is how inaccurate these estimates can be, and usually are. These estimates are a nightmare for real estate professionals especially when over 90% of home buyers begin their search online. I have had to experience it plenty of times and I know it is a common issue among other professionals. We must explain to our clients why the Zestimate is so far off from the purchase price. I’ll tell you why this zestimate can be a nightmare if you are in my profession.

Zillow is a fantastic website for home buyers to begin their search. It allows you to pull up a map and view all the available homes in the area and even see the price of homes that have recently sold. The problem comes in with Zillow’s estimate of the current value of the home when this estimate has not been properly done. Zillow simply takes the average of homes available and sold in the area and slaps an estimate on that home, that’s it! No further research goes into the property before this estimate is put up for the world to see, that’s why at times you can see a huge discrepancy in the estimate and the actual purchase price.

When a home is having a proper estimate put on the property we conduct a BPO (Brokers Price Opinion). This is where you actually send a real estate professional to the property to see the condition, land, upgrades, etc. We then pull comps of all the current homes on the market, homes currently in escrow, and homes sold in the previous few months. We use these comps to compare the subject property to and from there we can make an educated guess on the value of the property in question. Is it a similar process? Sure, but it is much more in depth and thorough. Not to mention it is done by a real estate professional that is familiar with the area.

I read an article recently that mentioned replacing the zestimate with these types of BPO’s. Zillow will have a local real estate professional run a BPO on the property in order to get a more accurate idea and provide a much more informative estimate of the home. I do hope this is the case and we can stop giving buyers a false idea of the market with these “zestimates.” I got to experience how terrible these can be with one of my listings. The Zillow estimate was around $850,000 but after a couple BPOs the property was valued around $450,000. That’s a $400k price difference!! I hope Zillow will realize this as they have received plenty of backlash about this feature since it was created.

What do you think about Zillow and their Zestimate? Do you have a favorite home search website you like to use?

For an amazing home search website focused on the Reno/Sparks area check out my website: http://jeredlehman.com

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January 2016 Market Report for Reno/Sparks

It seems that the housing market is off to a solid start for 2016, even in our slowest month of the year. Even though sales are down 25% from December, they are up 3% from January of the previous year. Median home prices are currently down to $277,000 from $290,000 in December. All these numbers are positives from last year at this time and we should continue to see growth throughout the year. I expect a good year for the housing market in our area despite the national concerns of the stock market and interest rate hike. With the growth of our area, our housing market will reflect these changes and show the prosperity and bright future Reno is looking towards.

Follow the link below for more information and complete graphs:
http://rsar.realtor/docs/default-source/2016MarketReports/jnauary2016marketreport.pdf?sfvrsn=2

Watch the video below for a complete summary of the January Market Condition:

Why Rent When You Can Buy?

One of the misconceptions I constantly see, especially among first time home buyers, is how much money you need to save before you can buy a home. What I want people to understand is that not only can you get an FHA loan, which only requires 3.5% down, but you may also qualify for a buyers assistance program. The program in particular that I am talking about, that every lender should be mentioning to first time home buyers, is the Home Is Possible grant. This down payment assistance program is available through the Nevada Housing Division. The Home Is Possible grant will give first time home buyers a 4% down payment assistance grant on an FHA loan. Let’s take a look at home important this is.

As I mentioned, the FHA loan only requires a down payment of 3.5%. This means that with a 4% grant, your entire down payment is taken care of and still leaves you a half of a percent towards your closing costs! Now let’s take a look at what this means in dollar amounts so you can really grasp how important this can be for you. On a $170,000 home, you are looking at an FHA down payment amount of $5,950. With title fees and closing costs added in as well you are looking at an out of pocket amount, roughly around $12,000. On a purchase price of $170,000, the 4% grant will provide you $6800 towards this cost. That means, after the grant, you will be able to purchase your first home for only $5200 out of pocket, upfront costs. Take into consideration these are only rough estimates and round numbers to give you an idea of what you are looking at. That big, scary down payment doesn’t look so terrifying now! The best part is, this puts you in a home you now own, and most likely your mortgage payments will be cheaper than renting a similar property. The even better news is, in the end, you now own a solid investment for years to come!

My goal here is to help you begin to understand that there are options out there and programs that can help you accomplish your dream of home ownership. I want to provide you with this information so you are well informed when it comes time to make that decision of your first home purchase. Please do not hesitate to reach out to me if you ever have any questions about this topic, or any other ways I can clarify certain aspects of the home buying experience for you.

Please follow the link below to find out even more about the Home is Possible grant:
http://housing.nv.gov/programs/FTH/Home_is_Possible/

Making Those Small Improvements Or Repairs Can Help Immensely When It Comes To Selling Your Home

When it comes time to sell your home, most sellers hate the idea of not only having people come through your private space, but also having to put more money into something they are getting rid of. What sellers do not realize though, is that $300 repair you need to make can actually add thousands to the value of your home, simply by showing the buyers this home is in pristine, move-in condition. Even small upgrades that are easy on the wallet can add immense value to the home. What sellers need to realize is that they are selling a product, and that product needs to come across in the best light possible.

It is our job as Realtors to assist our clients in viewing the home as a potential buyer. How would you see your property if you were viewing it as a potential buyer? What improvements would you make to the property, or what areas need some repairs or freshening up? Address these problems ahead of time and let your home rise above the rest as the cleanest, move-in ready home in the area.

Appearance really does matter when it comes to listing your property. It has been shown that homes for sale that are properly staged can sell for an additional 15% profit and close, on average, 30% sooner. This means that by simply giving the home a proper appearance, you can make more money in less time. So when it comes time to put your home up for sale, remember how big of an impact appearance has and that a little bit of work can go a long way to netting you a larger profit in the end.

Here is an idea of some cheaper improvements that can really add value to your home:

http://on.trulia.com/1PMsl37

2016 Real Estate Trends: What to expect

There are a few trends that are dominating the real estate headlines for 2016. I wanted to take a few minutes and give you an idea of what to expect for the rest of the year as we wrap up our first month of 2016.

Home prices will level out
2015 brought us a steady growth in home prices throughout the nation. This trend was especially noticeable here in the Reno area with a 14% increase in home prices from the previous year. The most noticeable item from last year was the telltale sign that prices would start to level out. In 2015 we saw median home prices in the Reno area remain around $290k for 4 out of the 12 months. This is a sign that we were already starting to see this trend take place. Even with all the new businesses coming our way it seems home prices will not see any significant changes in 2016.

Generational Shifts will move the market
Millennials accounted for nearly 2 million home sales last year. With home markets returning to normal and personal finances improving, it seems many millennials ended their home buying skepticism from 2011 and began to purchase their first homes. This trend will continue into 2016, and with an improved outlook on the economy, should continue to grow. The generation X group is reaching their prime years for financial earning and will be looking to either upgrade their current home or purchase a second property. We will also see the Baby Boomers look to adjust their lifestyle as many are looking towards, or are currently entering, retirement. It seems that 2016 will bring a shift in the market as we see each generation reaching significant points in their lives.

Affordability will be a primary focus
It seems many home builders will be focusing on producing homes in an affordable price range for the year. This trend is noticeable in the Reno area as well with many single family homes being built in the $200-300k price range. As these large companies continue to come to our area and more new homes will need to be built, it seems this price range will be a large focus for the new home builders in our area. How will these affordable new homes affect the prices in our area? This trend will be something to watch to see what kind of impact it may have on resale value for homes, especially when someone may be able to buy a similar new home for nearly the same price.

Rent prices will continue to rise
This is a topic I have touched on before about why now is the time to buy over rent. It seems with the lack of inventory not only in our area, but nationwide, landlords are taking advantage of the shortage and continue to raise the cost of rent. As the rent prices continue to increase much more rapidly than home prices, we may see a trend of renters deciding to purchase a home. It may soon become a no-brainer to purchase instead of rent, as mortgage rates continue to remain low and rent prices all over the nation are skyrocketing. With all the added benefits of home ownership, many on-the-fence renters may finally make the leap into home-ownership.

For more on this topic follow the links below:
http://www.realtor.com/news/trends/five-key-trends-for-2016/

http://www.fortunebuilders.com/4-real-estate-trends-worth-watching-in-2016/

http://www.marketwatch.com/story/4-real-estate-trends-well-see-in-2016-2015-12-09

The Tesla Effect: How The Gigafactory Is Assisting In The New Era Of Reno

Reno, also known as the Biggest Little City, better known by non-locals as a cheaper alternative to Vegas. This is the image that Reno has been trying to overcome, especially within the last few years. Any notoriety Reno had received in any national publication was usually based around gaming, the high level of alcoholism, or the drive-thru divorces. As locals, we know that Reno is an amazing place to live, especially for anyone who loves the outdoors. With some of the best ski resorts in the world, and by far one of the most beautiful lakes in the world, within a short car ride from downtown, we are well aware of how great our city is. But Reno has never been known as a great place for a large company to locate to, or even more so, a place to launch the next big startup. That is, until now!

Casinos, dive bars, and quick divorces are making way for luxury condo towers, tech companies, and manufacturing.

With major companies such as Tesla building the gigafactory and Apple’s expansion of their iCloud service coming to the area, Reno is beginning to see a major shift in the way it is being viewed. The casinos, dive bars, and quick divorces are making way for luxury condo towers, tech companies, and manufacturing. We are also beginning to show the nation that we are a hub for the outdoor enthusiast. Whether it is hiking, biking, skiing, exploring the desert, or just enjoying our amazing views, there is no shortage of outdoor activities for one to partake in. But what does all this change mean for the people that are already here, especially the real estate market?

The arrival of these companies means more jobs in our area, and also the relocation of many existing employees into the Reno area. Experts have forecasted a rise in population to the Reno/Sparks region of about 50,000 people over the next five years. According to the Economic Development Authority of Western Nevada (EDAWN), this will require the addition of 9000 new homes per year. We have also begun to see the rise in home prices over the last year. The Reno Sparks Association of Realtors has reported a 17% growth in the median home price. This is good news for current home owners and future sellers. The addition of new homes will also be good for perspective buyers looking for more availability in what is still a scarce market in our area.

This is an exciting time for our not so little town. We are starting to see the effects of a new era coming to Reno and the future looks bright for our little city to prosper and flourish with a new image as Silicon Valley’s little sister.

To see some of the nationally published articles about Reno click here:

http://www.businessinsider.com/tesla-is-the-best-thing-to-happen-to-reno-since-the-gold-rush-2015-6

http://www.wsj.com/articles/reno-sees-future-and-it-isnt-casinos-1445642382

http://www.bloomberg.com/news/articles/2015-04-10/reno-wants-to-be-silicon-valley-s-back-office