Over the last five years, one of the newest developments in real estate is the ability for home buyers and sellers to search online for a home’s value and we are often asked by clients how accurate the valuations are. Unfortunately the values calculated often are inaccurate and misleading.
The popular web sites used by our clients and prospective clients are Zillow.com, Cyberhomes.com, and Eppraisal.com – all offering free home estimates. We think these sites are great for seeing trends or what other homes have sold for, however current values estimates can be more of a hindrance than a help.
These online home appraisal web sites assign home values without knowing the features or upgrades of a home or the neighborhood in which it is located. Factors such as backing to a freeway, an awesome view, large lot but no backyard, can all have an impact on price. Often we see these web sites offer a price range of $40,000 – $80,000 more or less than the actual value of the home. We’ve seen spreads of over $150,000 or more on median priced homes. Just the other day we were looking at a local home with the home owner and these three sites estimated the home to be valued between $481,000 and $610,000 – that’s a very large margin of error.
Since housing markets are local and not every home of a certain size is the same value, it can be very easy to be misled into believing a home is worth more or less than the actual value.
Unfortunately these sites only have limited data on which to base the estimates. Often the underlying data from public records is incorrect (square footage, number of bedrooms, etc) and the estimates are based on past sales information that often doesn’t reflect the most recent sales. The valuations also have no understanding of current market conditions in terms of the level of inventory, absorption rate, on market competition, homes currently in contract and these all can vary by greatly by city and neighborhood. What’s happening in Reno and Sparks will be different to Carson City. Neighborhoods within Reno can vary greatly from one to the next.
Working with your local skilled REALTOR® can help minimize inaccuracies in home values. We can provide local housing market data and show homeowners far more information to help determine an accurate list or offer price. You can also go to our Market Snapshot service at www.ShowHomeValues.com and receive more current and complete market and pricing information.