In the shifting sands of today’s real estate market how do you get a true view of the value of a property?
For years, realtors were the gatekeepers to that information. In fact, supplying a recommendation for what you might sell your property for was part of their job description. An individual could access that information – with painstaking difficulty, visiting the courthouse for tax assessments and for sales prices of comparable properties.
But in today’s instant access to online information – all that has changed. With the click of a mouse you can visit Zillow or Homes.com and get an estimate in seconds – with no real estate agent attached.
A blessing for consumers? Maybe, but it’s mixed at best. Both sellers, buyers and even voyeurs are finding online real estate estimates change at an alarming rate.
In The Fuzzy Math of Home Values on SmartMoney.Com (http://www.smartmoney.com/spend/real-estate/the-fuzzy-math-of-home-values-1320260595148/), Alyssa Abkowitz describes some astonishing examples of inaccuracies on popular home valuation websites. For example, Jason Gonsalvez found his Sacramento home was valued on one site for $550,000 - $200,000 below his mortgage, on another for $640,000. But the real- life appraisal for refinancing was $1.5 million. And that’s just one example: inaccuracies abound. According to Abkowitz, “Evaluations that are 20, 30 or even 50 percent higher or lower than a property’s eventual sale price are not uncommon."
And there can be adverse consequences. An inflated valuation can give home owners an unrealistically high expectation of what their home is worth and make them inflexible on pricing. A too low estimate could encourage buyers to make low ball offers on property they believe is over priced.
So what’s a consumer to do?
Until these websites improve, consider their estimates much like weather predictions, or hot tips on the races; guesstimates at best. If you want to determine the value of a property – accurately – the best way is the old-fashioned way: find a good real estate agent.