I-Team Report: Home buying at your fingertips - WNEM TV 5

I-Team Report: Home buying at your fingertips

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(Source: WNEM) (Source: WNEM)

The real estate market is constantly changing. Just like Michigan weather, it can be hot one day and ice cold the next.

To keep up, many of us are turning to our smartphones and clicking on the weather app. Well, now people are doing the same thing to buy and sell houses.

"Back in the 90s when we were selling real estate we carried a book. It was an MLS book and we were the keepers of the information - as we put it. So, when things changed and went online we gave the information to the consumer so they could see what we saw. So, it's changed a lot,” said Linda Sarmiento, real estate agent.

Sarmiento has been selling real estate in Saginaw County for 22 years. She said in recent years apps like Zillow, Trulia and Realtor.com have changed the way they do business.

Those apps allow you to search for homes, check out prices and even take virtual tours without ever leaving your couch.

It is all right at your fingertips.

They even have complex formulas to estimate property values. You can literally buy a home without ever seeing it in person and without hiring a realtor.

"Technology has changed so much. It's even changed the real estate industry,” said Ashley Dane, director of digital strategy at Berkshire Hathaway.

To keep up with that trend, Berkshire Hathaway hired Dane, but she cautions while the apps are a great starting point she doesn't feel they can fully replace the real thing.

"There's so much knowledge that our real estate agents have inside their head that don't exist online. So, we have to bridge the gap. We have to find a way to leverage that online resource, but help the consumer with a solid real estate agent beside them to help navigate that home transaction,” Dane said.

That expertise comes at a price, though.

Realtor commissions in Michigan are typically about 6 percent, split between the buyer’s agent and the seller’s agent.

So, if you sold your home for $150,000, the agents would take $9,000 off the top. At that price, you can see why some are opting to go it alone.

Is that the smartest choice, though?

More often than not, the apps are missing a human element that gives you an accurate estimate of the homes you're looking at in your neighborhood and your market are worth.

Apps like Zillow get their data from a mix of public records and the Multiple Listings Service, commonly referred to as the MLS. 

Agents can also send in their housing information directly to Zillow, but Sarmiento said there are some very real glitches with how these apps process that information.

"Well one of the big things that we found with some of these apps is that they say every home has a pool and that's not true. So, you have to go back and edit your information. We do give the information to Zillow, but what they pick up is not always accurate,” Sarmiento said.

Showing up to a home expecting to see a pool where there isn't one could be disappointing, but Dane said there is a bigger problem. She said the apps often miscalculate the value of the properties being advertised.

"Are you leaving money on the table because Zillow told you to list your home at 179, but really based on today's market conditions in Saginaw you should've listed it at 250? And that's not an exaggeration. That's a real situation that can happen because it's just a computer system, there's no human behind it and think people give too much credit to that,” Dane said.

Sarmineto said that happened to her recently in Saginaw.

"I had gone out to a listing appointment and I did a market analysis and listed their property at $279,000. They pulled up their Zillow estimate and it was $174,000 - so there was $104,000 possibly left on the table,” she said.

On Zillow’s website though, they point out that most of its estimates in Saginaw County are within 20 percent of the actual sale price, but they also make it clear those estimates are only a starting point in determining a home’s value.

They recommend consumers get a comparative market analysis from a real estate agent, a professional appraisal and visit the home in person too.

Dane said, unfortunately, far too many clients are ignoring this advice.

"We entered a world where if it's on the internet it must be true and so every consumer out there would come back to our agents ‘Well Zillow said this,’" Dane said.

With the housing market heating up just in time for summer, Sarmiento said just because school will be out, doesn’t mean you don’t have to study.

“Do your due diligence. I mean, this is your biggest purchase. It's your life,” she said.

Copyright 2018 WNEM (Meredith Corporation). All rights reserved. 

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