Each Monday, we'll be creating a new video showcasing questions we've received from both buyers and sellers and will be sharing our answers with you. We'll be posting the transcription here as well as a link to the video on YouTube as we know some of you prefer the videos while some prefer reading. CLICK HERE to watch this week's show!

Transcription

Nick Deckard here with the second episode of our Q&A show!

I got a text over the weekend that from a potential seller who was curious why homes around them were going for such a different number than Zillow's Zestimate were spitting out and that's a pretty common question.

It comes down to a couple simple things, especially here in Ocean City, but a little bit of background on how those algorithms work. 

Whether it's Zillow or Realtor.com or any computer-generated home value, it is very limited in what it can do. It's off because:

1. It can take surrounding home sale data and, as you know, here you could have an original 1940s single-family home 3 bed 2 bath next to a just built monster three-bed two-bath single-family home. Do you think those are anywhere near the same value? Probably not, but Zillow doesn't necessarily know how to factor that in. 

2. Another factor that can really impact things is how much home values vary block by block here. The closer to the beach you get or on the bay - they don't really understand because, again, it's computer generated. They can't factor that in just right to really give you a fair and accurate value of what your home is worth.

3. The data that Zillow and other sites get as far as your upgrades is very very limited, especially because not all upgrades require permits. 

So permitted jobs - does the data get to them? It should. 

Will that impact the Zestimate? It might. It's hard to say one way or the other because it's very finicky that way. You might see that your home value is much higher than you thought or much lower than you thought, but here's a story that makes it hit home. 

The owner of Zillow, when he sold his his place in Seattle back in 2014, I believe may have been 2016 - He sold it for 40 percent less than the zestimate and this was a over a million dollar home. So 40% ain't nothing. If it's not right for his own property, how could you expect it to be right for yours?

The key here isn't to never use them to never lean on them to get a ballpark idea of what you might be worth, but people need to understand just how off they are and how inaccurate they are. So it might give you a sense, but don't make any decisions based on that! Your best bet is to reach out to a Realtor or and appraiser who can give you a much better estimate. 

Now for an appraisal, you have to pay but most agents, myself included, provide that as a free service. So I mean there's really nothing to lose by getting an expert professional local opinion on the value of your home so that you can make an informed decision.

Each Monday, we'll be creating a new video showcasing questions we've received from both buyers and sellers and will be sharing our answers with you. We'll be posting the transcription here as well as a link to the video on YouTube as we know some of you prefer the videos while some prefer reading. CLICK HERE to watch this week's show!

Transcription

Hey there! Nick Deckard here with Ron Gifford and Associates. I'm actually at an open house right now, but I just had a buyer come through who asked me an interesting question that I've quantified and helped people with many times and I just got a novel idea - I'm going to start answering these frequently answered questions. 

One a week of questions that most buyers or sellers have asked at one point or another and start putting them out there weekly for you guys. Just a question and answer session. 

So this particular buyer - pretty easy question. How much do I need to put down? 

You think it's an easy question, but there are a few different caveats for that. It especially depends if that's is going to be your primary home, secondary home, or investment property. So we'll take it one at a time through the different loan types. 

Ultimately, your lender is going to be able to tell you exactly what you need, but here are some guidelines. 

In Ocean City, if you're going to be buying a secondary home, the minimum that you have to put down as 10% versus if it's your primary, depending on loan type, might be as little as 3%. Now, depending on the price of the home that you're purchasing, if you're going to need a jumbo loan, that typically is 20% minimum, though it could be higher depending on the lender and how the loan is going to be structured. 

A very new change to minimum down payments happened recently for condos that are in a building with four or more units. So there are plenty of those here in Ocean City. I know we're primarily single family and duplexes, but any building with four or more units now and going forward unless the laws change again, you will need 25% down at a minimum. 

Keeping that in mind will allow you to plan and also to see what type of property might be the best fit for you and what you're looking for. 

So if you have any questions on this, feel free to reach out. My cell phone is 609-602-2847 and I'd be happy as well to send you the information for a couple of local lenders that we do a good amount of business with who take very good care of our clients and are extremely knowledgeable on the local market.

TIP: Make sure to use our Open House Map to view upcoming Open Houses and to check out the properties before heading out! If you have any questions ahead of time, contact us!