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How Accurate are Online Home Valuations?

Online home valuations

We have many other innovations today that have taken us to new places. Agents are required to adapt or improve their skills as a result of the advent of new technology.

The online valuation or estimate of homes is one of these essential pieces of technology. 

Online estimates are becoming increasingly popular thanks to sites like Zillow, Redfin, and Trulia. They supply details regarding the value of a home, as well as a means for clients to get it assessed. While the convenience is obvious, the accuracy of the online estimates cannot be denied.

This site is popular among homeowners just starting to sell their house. If someone has an idea to sell their home, they may just want to check the market before making a decision. These sites are exceptionally popular and are great for locating homes in your area, but these sites have an issue.

These websites all use an algorithm to determine the value of your house based on the area’s price per square foot. It sounds simple, right? This is what you should know! 

Why They Aren’t Always Right

It is Automated

It’s not like there are thousands upon thousands of tiny drones with Artificial Market Intelligence sweeping through every property and producing some kind of educated estimate. Without any supervision from market experts, automated systems can generate a predictive estimate on their own. This computer-generated software doesn’t look for future movements. Anything that’s happening in your local market is not going to be covered. The prediction of the computer is not based on hard or fast data. It only considers patterns. 

Clients who are interested in the insiders of the market will always find the best agent to help them, for example a Greenville buyer’s agent. It is not possible to get a precise estimate using automated data or generalized findings. Some might argue that these services are a disservice. 

Online Home Valuations

It Looks For Patterns

These websites all use one ZIP Code to calculate the average price per square feet for each ZIP Code. This is why buyers and sellers are often confused about the value of their homes. These websites were not created from sales comparables that have been inspected by the human eye. These websites are priced per foot in a given location, and the computer puts them out.

They use a zip code to calculate an average. These websites may be computing every house in the 90210 zip code at 1500 dollar per foot just because that’s where the average price is between south and Sunset. This is absurd. The average home price per foot is taken from 3 million to 100 millions which also increases mortgage rates.

Online Home Valuations

Unique Property Values Can’t Be Accounted For

Even though you may live in the same area, different houses can have very different characteristics that could make the home’s price significantly higher.

The computer cannot use its algorithm to adjust the price for extraordinary features or special amenities. Zillow, an online estimate provider, even has this explanation on their website. They state: “We don’t know the home values or remodels of homes unless they are reported to the local tax assessor. These values are not used for Zestimate calculations.”

Other factors, such as the stunning skyline view, won’t play any role in determining an estimated price.

It is easy to get a great estimate by simply calling a realty agent and picking up the telephone. These websites are great for finding homes available. But, they can often be inaccurate in determining the home’s value.

Online Home Valuations

Fate of Agents & Online Estimators

Spencer Rascoff (Zillow CEO) said that anyone buying or selling a home needs a realtor. It is a complex, emotional and often difficult transaction. It can be very valuable to have a great friend by your side.

These tools are practical and help website visitors find a site. It is also very appealing. However, after looking around and doing more research, many homebuyers and home sellers realize that consulting a local real estate expert is the best way to go before making an offer on a home.

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