How does Zillow’s “Zestimate” come from?
I don’t think anyone knows their exact algorithm but it combines sales data, assessment data, asking prices (yes, they use asking prices) and economic data. Their estimates can also be manipulated by adding or subtracting upgrades.
If you click through a bit, you can find their accuracy charts — which lets you know that they are +/- 10% on a good day. But the bottom line is that Zillow and all of the others all arrive a different values. I say that clients should use these estimates IN their analysis, but not AS their analysis.
Do you have inspectors and lenders you tend to work with?
Absolutely, but not for any other reason than they are great operators and true professionals.
There is a perception that may agents will send clients to the service providers who give us kickbacks — this notion is archaic as it is untrue. Kickbacks are illegal and the idea of putting our careers at risk for a few dollars is pretty foolish.
Our recommendations come from our best experiences, thats all, so the ‘kickback’ we get is the superior service that you get.
What are your favorite neighborhoods?
We like a lot of neighborhoods — and we can help you understand the market drivers for each.
At the end of the day, the best neighborhoods are the ones that work best for our clients. Hopefully, our experience and insight can be used to help you understand how to best fit your needs with the place you want to call home.
I want to buy a house to rent out.What are the key things that I should look for to actually make a profit?
There are so many things to consider, but probably the most important is the long term goal. If you are interest in cash flow, then a more moderately priced home tends to cash flow a bit better, but a more expensive home may appreciate faster and sell more quickly when you need to divest of the home. The other major factor is time. If you don’t have a great deal of time, consider and town home or condo that included some level of maintenance. Similar, if you want to be your own landlord, make sure you have the time.
What is tax abatement?
Tax abatement is a program available in the City of Richmond that reduces the real estate taxes due on a property for a finite period of time. The Abatement program can be used by those who improve the values home through renovation. The best way to think of the abatement program is to imagine that city forgoes taxing the improvements made for roughly 7 to 10 years. There are a lot of rules and requirements to qualify, so do your research before you start renovation.
What is a home warranty?
Many times, you will see ‘home warranty’ referenced in remarks about a home. This refers to is a warranty that can be purchased to warrant the systems of a home for generally a period of one year.
Home warranties can be purchased by the seller of a home and transferred to the purchaser at closing. They typically cover mechanical systems, appliances, and other devices in the home. They generally do not cover the structure or materials (roof, hardwood flooring, foundation, etc). New homes, however, come with state mandated structural warranties, as well as manufacturer’s warranties, that last longer than the one year home warranty.