Why Home Values On Internet Sites Are Not Always Accurate

Today’s post is about why Palm Harbor home values on internet sites like Zillow and Trulia are not always accurate.

The Wall Street Journal had a great article the other day that detailed why home value sites are not spot on – How to Figure the Fuzzy Math of Internet Home Values.

Some of the bits that I thought were especially interesting included:

“But for figures that can carry such weight, critics say, the estimates can be far rougher than most people realize. Valuations that are 20% or even 50% higher or lower than a property’s eventual sale price are not uncommon, as the sites themselves acknowledge.”

I am no mathematician, but 50% higher or lower seems like a lot. That would mean that they valued a $300,000 house at just $200,000 or that they said a $600,000 house was worth as high as $900,000. WOW! So why is that a problem for you if you are considering selling your home and it says that it is worth MORE?

If you were selling your house in a vacuum and there were no other houses on the market, you MIGHT be able to eek out a higher price like that, BUT that is not the case. The people who come and see your house will look at other, higher priced houses and notice that yours is not in the same league. Barring that, eventually if you sell, an appraiser who is not just compiling data but who is a living, breathing, thinking person, will value the house at market value and the numbers won’t match. For us, it means that you have a value in your head of a MUCH higher price than your house can bear and even if we do our jobs perfectly, you will be disappointed by these inflated numbers.

And automated models aren’t designed to account for the unique construction details that often make or break a deal, or for intangible factors like a neighborhood’s gentrification.

This is a BIG one! While everyone likes to think they have a special house, few do. But those few DO NOT always have the proper home value estimate on their property. In Pinellas County, we have waterfront, waterview and a number of different water designations to properties. Some mean that there is a clear, open water view out the front windows and some mean that if you stand on your bed, looking west in the dead of winter, you can see a peek-a-boo view of the Gulf of Mexico for 7 minutes a day. BIG difference.

Then consider the example the article gave. These home value estimates may not take into account that your house is down-wind from a dump or that the airport is next door or that there are 7 neighbors who are all Hell’s Angels and who ride their bikes around the neighborhood at all hours. These are intangible factors that will affect how much you can list, and ultimately sell your house for. Realtors are good at knowing how to price houses so that they sell in a reasonable amount of time (it is what they do) – huge national websites have no local knowledge at all to help determine fair market value.

How This Effects Palm Harbor Home Values

So, do we think that Zestimates from Zillow or Trulia’s Palm Harbor home values are devil spawn. Nope, we just take them with a grain of salt. All of those sites allow us to post our listings and are a great tool for us to find buyers so we LOVE these guys!

If you are considering listing your home for sale and would like an official CMA (Comparative Market Analysis) to go with your online Palm Harbor home value estimates, give us a call today! 727-366-0324

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