For as long as consumers have bought and sold homes, they have been fixated on the price. Sellers want the highest prices and buyers want the lowest prices, and yet somehow they come together and make a deal, millions of times a year.
Before the Internet, the only way you could figure out what a home was worth was through a real estate agent who used closely guarded data from the multiple listing service. But there has always been reason to be suspect since it’s proven that agents often talk owners down on price too far and sell their own homes for more than their clients.
Soon after the Internet came along, home data became more easily available and numerous companies promised to deliver consumers a home value for free. But the new automated valuation methods turned out to be grossly inaccurate and consumers found themselves being turned into leads that were sold to the highest bidder and they still didn’t get the actual prices they wanted.
Today, Surefield is turning that sordid history around with a refreshing new approach called Pricepoint. Instead of using the good old “trust us” on price, we are inviting you to trust yourself. Pricepoint leverages your own judgement, the same data as the pros, and arguably better tools to generate laser accurate and transparent pricing.
Pricepoint helps you derive prices the same way as a real estate agent — by looking at previously sold homes and calculating a valuation estimate based on the similar ones. Our approach uses a straightforward price per square foot calculation to generate a price. And since home pricing doesn’t happen in a vacuum, we also show what the competition is up to by bringing active listings into the mix.
It all adds up to rock solid prices you can actually trust — and inspect for yourself. Here is how you use Pricepoint:
1. Identify target property. To use Pricepoint, first you enter an address for the property you want to price (in Washington state only, for now) and the finished, or livable, square feet. If you don’t know, Google the address for the tax assessors data and see if it makes sense to use. If you are pricing a home as a buyer, start with the “advertised” square feet in the listing, but be on the lookout for exaggerations such as the inclusion of an unfinished basement.
2. Review initial results. Next, Pricepoint displays the 10 most similar sold homes and 10 active listings near the target home. We display a valuation estimate based on the sold homes as well as a competitive indicator based on active listings — but don’t read too much into these numbers since they are just a starting point.
3. Exclude outliers. Pricepoint is all about excluding dissimilar homes on the way to an accurate price. How do you decide which homes to exclude? Start by looking at the photos. If a given home is nicer or worse, hit the exclude button since you don’t want them contributing to your pricing. Key features you want to compare include the kitchen, bathrooms, number of beds and baths, and the views.
4. Analyze more data. Pricepoint includes analytical tools that make it quick to find the most obvious homes to exclude. One of the more powerful tools are the scatterplots, which spreads home data across two dimensions. Try out the the price per square foot scatterplot to quickly segment how nicely finished the homes are, as one example. There are also a few histograms and a sortable table as well.
5. Use the map. Did we mention that Pricepoint has a map? Of course you need to spatially understand where all of these homes are in relation to each other. They (rightly) say: location is everything in real estate. Make sure to exclude homes not in the neighborhood, on a street with different traffic levels, or that have some factor that could throw off the valuation. Your price will only be as good as your decisions!
6. Refine for more accuracy. Over time, you’ll see a story develop in your data. And that story will point to a price. If you want to get more accurate on a second pass, you can refine the parameters to tighten up the prior sales date range, reduce the size constraints, or increase the number of listings.
That’s it! Take Pricepoint for a spin and let us know what you think at email@example.com, or if you find any bugs or can think of some new features. We’ll get on it!
What's your home worth? Find out based on recently sold homes and analyze the competition