A year or so ago I wrote a post about the the reliability, or rather the unreliability of Zillow's home value estimates known as Zestimates. Did you know that in the Metro Miami-Fort Lauderdale region they only get within 5% of the actual value of a property 55% of the time. Their median error is 4.2%. On a $500,000 home they could easily be off $20,000 in either direction.
Since then technology similar to Zillow's has become available to brokers and agents that allows them to provide an instant estimate of a homeowner's property. I have it myself. Feel free to try it out. The trade off for this free information is you must provide your contact information.
There are a lot of things that computers can do better than humans. Estimating a home's value is not one of them, however.
1. Inaccurate data from tax records and the MLS is pervasive. This is where these site gather their information from in the first place. Garbage In equals Garbage Out. If I am doing a valuation and see something that doesn't look right, I investigate and make phone calls to confirm the data is correct. I have seen tax records that showed a home to be 15% smaller than what an appraiser measured when the owners bought the home. Did that affect the value much? It sure did!
2. A computer won't know how great your home looks. There is no way Zillow or any other site can factor in upgrades and the remodeling you may have done. Two similarly sized homes in the same neighborhood could have valuations that are easily 20 to 30% apart based only on condition.
3. Availability of information. Even in areas with a lot of turnover, like South Florida I occasionally run into unique homes that have few or no similar comparable sales in the same market area. Fortunately, I have been trained to work around that. A computer will just crunch the numbers it has and spit out a value, mostly at random.
Online home valuation are fine if you are just a bit curious about the value of your home, or are in the early phase of your decision making process. Nothing beats a human, with training and experience when it comes to home valuations.
Related:
Can you really rely on Zillow?
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