By Elaine Mallon
Today's Home Buyers and Sellers are more educated than ever, yet both continue to rely on faulty information provided by various Internet resources (such as Zillow, Realtor.com, Trulia, Homes.com, etc.) to help determine a home’s value. It is important to be aware of the extensive inaccuracy of these home value “estimates” in order to protect your investment dollar.
Approximately 90% of home buyers begin their search on the Internet, and many blindly rely on these "estimates", despite the fact that valuations on these sites – by each site's own admission – can be wildly inaccurate.
These online home valuations can be 20%-50% higher or lower than a property’s eventual sale price, as the sites themselves admit. That means a Buyer who relies on this rough information might be passing up a truly good value or a Seller who relies on this data might be undervaluing their home by tens of thousands of dollars, if not more.
“A Trulia estimate is just that – an estimate,” says a disclaimer on the site’s home value tool. Zillow goes a step further, publishing how imprecise its estimates can be. Every major site urges house hunters to consult appraisers or real estate agents to refine their results.
Beware: These online sites don’t evaluate each property individually to determine “true market value.” They clump nearby homes together, using tax assessor’s office data and recent sales. Their values are based on broad computer algorithms, not refined human expertise. They don’t take in to account each home's unique characteristics, upgrades, condition, extras or other intangibles that affect value.
Zillow has accepted revisions on 25 million homes – perhaps the strongest testiment to how seriously consumers take its estimates and how off its numbers were.
People need to realize this whether they are buying, selling or refinancing because it can greatly affect their decisions and their bottom-line. With the right professional counsel, no one should be leaving money on the table in this housing market.
Elaine Mallon is a Broker Associate with Peninsula Sotheby's International Realty, the most prestigious brand in the sale and acquisition of luxury real estate. She is a Certified Residential Specialist, Certified Negotiator, Certified Investor Agent Specialist, Certified Corporate Relocation Specialist, Certified Palos Verdes Area Specialist and an award-winning Marketing & Public Relations veteran.
For assistance with all your real estate needs, please contact Elaine at: www.PeninsulaSIR.com.