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Determining Property Value - Zillow Algorithms vs. Broker Valuation


Evaluating the current market value of real estate is among the most important services we provide to sellers. Properly assessing value can be the difference between a property selling or not selling, and is a 2-stage process in any real estate transaction involving a loan.

  • The first stage involves securing a buyer who is willing to pay the determined market value. Market Value has been loosely defined as, “The price at which a Seller is willing to sell and a Buyer is willing to buy.” So, a buyer must agree with you that your home is worth what your wish to sell it for. Let’s say you get that. Yay! You are under contract!

  • The second stage involves an appraiser assessing the market value of the property on behalf of the bank. And while in some rare instances, for the right property a buyer may be willing to pay above market value for a home, the bank will never agree to pay above market value for a home. The appraiser’s job is to protect the bank from paying too much for any given property. So, the appraiser must agree that your property is worth what you are under contract to sell it for.

Because of this, having a REALTOR® properly assess and recommend pricing for your home is the pre-step to this 2-stage process. As noted, getting this right from the get go can be the difference

between selling or not selling (or selling eventually, after a price reduction… or three).


“Wait a minute,” you might say, “I don’t need a Realtor to tell me how to price my home; Zillow algorithms take care of that.”


Bottom line: If banks don’t think data-based algorithms are reliable enough to sufficiently protect their investment, you shouldn’t rely on them either.

Algorithms cannot replace an appraiser's or a REALTOR'S job, because evaluating the current market value of real estate is not exclusively formulaic. We don't simply plug data into a number-crunching program (in goes square footage, bedrooms, bathrooms, year built, lot size, etc., out comes a dollar value). Algorithms cannot take under advisement the more subjective aspects of property valuation.

For example:

  • Maybe your home, built in 1970 in a neighborhood of other 70s homes, has had all bathrooms and the kitchen tastefully updated, but a neighbor’s sale is from an all-original home.

  • Maybe your home sits on 5 acres atop Parrett Mountain with views of Mt. Hood, but another 5-acre property just one mile away sits low in a gully, or very close to the highway.

  • Maybe your home, built in 2017 in a neighborhood of like homes, has not had cosmetic updates, but you have professionally maintained all the necessary systems of the home and installed beautiful landscaping, while a neighboring property has been let go with little to no attention given to the basic maintenance needs of the home.

  • Maybe your 1,600 sq. ft ranch home on 10 acres has a beautiful barn or shop, whereas a neighboring sale was a manufactured home with no outbuildings.

  • Maybe your bare land has value in timber, or because it sits in the Eola Hills AVA, or because the well and septic systems are already in place.

There are countless scenarios where information must be gathered by physically putting eyes on the property, by taking extensive notes, by asking questions of the property owner, and by doing the necessary research to determine the correct value to assign for certain aspects.

An algorithm will never be able to properly account for these additional factors.


Finally, we don't think algorithms will ever be able to replace real time and experience in this industry.

As REALTORS®, we have our fingers on the pulse of the market. We know the homes on the market (we've probably walked through many of them!)


Our time invested in the neighborhoods and with the people of our communities informs our professional counsel regarding market value.

We know what buyers are looking for. We know how long the average home is sitting on the market. We can give you real-time counsel and education regarding trends, timing, and presentation. And at Bella Casa Real Estate Group we call ourselves a cooperative, meaning, if we come up to a situation that puzzles us, we have a a wealth of information and experience to access among our colleagues.


Providing a CMA (Comparative Market Analysis) to a seller with an assigned market value is step one in a job that your REALTOR® performs on your behalf. And guess what? We don’t charge you to do it. We provide it as a complimentary service, and we trust that we will be given an opportunity to win your business, which will include the listing and marketing of your home, and conclude in a sale to a buyer. It is only after we have completed the whole process of representing you in the sale of your home that we are compensated for our work.


So, what have you got to lose? Contact one of Bella Casa’s experienced REALTORS® today for a valuation on your home or property. We would love to meet you.



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