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Ask Andrew: Automated Estimates (Zestimate)

By WTOP Staff

Ask Andrew

This sponsored, biweekly Q&A column is written by Andrew Goodman, broker/owner of Goodman, Realtors. Based in Bethesda, Andrew serves clients in Maryland, D.C., and Northern Virginia. Please submit comments, questions, and opinions in the comments section or via email.

Q: How does the Zestimate on Zillow work? My agent has suggested that I list my property lower than the Zestimate, which doesn’t make sense to me.

A: I’m glad you asked this question. Many sellers believe the Zestimate is the end all, be all when it comes to pricing a home. However, there are a lot of inaccuracies, which make the Zestimate a good place to start, but not an accurate figure for what your home is actually worth.

Per Zillow, “The Zestimate® home value is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal.”

An appraisal, which I’ve discussed in a previous column, is a third party’s unbiased opinion of the market value of the home. But I believe the “true market” value of a home is what a buyer is willing to pay for the property.

An appraisal is the value that a lender uses to determine the market value of a home and basis for the buyers’ loan.

“The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research…”

Unfortunately, the Zestimate is based only on the data it has at its disposal. If the data to a home is incorrect or missing, the value will be inaccurate. The owner of the property can go into Zillow, claim the property and edit the information the way they like.

There are some things that Zillow cannot take into account when determining the Zestimate, including:

-Updated data about the property that hasn’t been edited on Zillow or public records.

-Updates, renovations, or lack thereof to a home or comparable homes.

-The homes icon or location on the icon map, which could hinder market trend analysis.

If your home has been renovated, Zillow wouldn’t be privileged to that information, causing their formula to calculate an inaccurate value. The same goes for recently sold homes and comparables. If the comparables being used to determine the value were renovated, Zillow wouldn’t necessarily know unless the data was uploaded to their site.

As Zillow has suggested, the real way to price a home is through the use of an appraiser or your Realtor. An appraisal and/or a CMA (comparative market analysis developed by a Realtor) will be able to take recent sales, upgrades, locations and other specifics about the subject property and its comparables into account when determining the true value of the home.

The Zestimate and other automated home pricing tools could be accurate, but you won’t know for sure until you talk to a specialist, an appraiser or a Realtor, who would be able to give you an accurate market value on the property using all of the property’s specifics.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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