As more and more homebuyers turn to the Internet to help them in their search for their next home, many have stumbled upon home valuator websites such as Zillow.com and Cyberhomes.com. The premise of these websites is simple – they allow the user to enter an address and a computer generated value is then outputted. While these services are designed to aid homebuyers when researching a prospective home, problems have continuously arisen with inaccurate values being taken far too seriously by users.
The San Francisco Chronicle recently did a report on the accuracy of these types of websites. They reported that the percentage of errors on home estimates from such websites is still very large. After reading the story, I decided to enter my home address into both Zillow.com and Cyberhomes.com.
Zillow.com estimated my home to be worth $478,500, while Cyberhomes.com estimated my home to be worth $514,701. Zillow.com told me that my home is 1,833 square feet, 3-bed, 2-bath, on a 17,056 square foot lot; Cyberhomes.com didn’t know how many bedrooms there were, stated my home to be 2,090 square feet, with 2 bathrooms, on a 22,220 square foot lot. In reality, my home is 2,200 square feet, 4-bed, 3-bath, and to be honest I do not know the actual lot size or its current market value.
These particular discrepancies can be very misleading for a potential buyer, should I ever decide to sell. I am willing to bet that discrepancies exist in the majority of home valuations created by these sites, especially for users that do not have comparable sales in the area of the home they are researching.
The truth is… a home is only worth as much as someone is willing to pay for it, and in today’s market I wouldn’t suggest anyone base their asking price on the estimation of a website using computer generated figures. For a true valuation of your home, I strongly recommend hiring a professional home inspector to conduct a walkthrough inspection of your house and then a professional appraiser. I also suggest that you compare your home to those of homes in your neighborhood that are currently listed, or have recently sold.
Curious to see how far off Internet home valuator websites are on your home? I am! If you have the time, let us and our readers know!
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This is a good post. My dad keeps using these online calculators for his home value, but I tell them its probably not accurate.
As a REALTOR I will tell you that when I do a CMA comparative market analysis for a listing…I use information from the tax records and from the client…then if the client is not sure that the tax records are correct I advise them to get an appraiser to do a professional appraisal….I would not rely on the computer driven sites that say they can give you an accurate evaluation.
Thanks for the great advice, Collene!
Does it mean that different sites and different stats. That is very weird to know. How they keep their databases and from where they are gathering different figures?
Perhaps someone can better answer your question… But it is my understanding that prices are derived from public records of a home’s recent activity (purchase / sale) along with neighboring houses. Lot size, square footage, beds / baths, etc., are likely taken into consideration by computer generated applications too.
Brett Shaw from Cyberhomes:
Thanks for addressing Cyberhomes. Just wanted to weigh in on the accuracy of home valuations. It is difficult for any valuation site to be completely accurate, as recent additions, renovations, etc. aren’t reflected in the current public tax data that many sites solely rely on for their info.
Cyberhomes.com is owned by Fidelity National Financial so we fundamentally have more content from which to aggregate our data. We have more than 100 million records (adding 575,000 new records each month), verified from the original source.
That being said, the estimate is just that, an estimate. I recommend that this just be used as a starting point for buyers/sellers. In Cyberhomes, you can edit a specific home’s facts (fixing the BR BA discrepancy) for a more accurate estimate. Apart from that, you may even adjust the market conditions to reflect the local market. I did my home and found the same problems. Once fixed, the estimate was $400 off of the home that sold next door (same model).
I am a real estate agent myself and still urge people to talk to a professional about the pricing/value of a home. Cyberhomes.com is rich with other information such as listings, full neighborhood analysis, and economic statistics for the area. Just type in an address or zip code and take a look around.
Thank you for clarifying, Brett.
It’s important for users of home valuation websites to know and understand that the values given are estimates… as Brett stated.
So use these sites to give yourself an idea of how much a home is worth, and use professional appraisal services to more accurately valuate your home or prospective home.
Totally agree with what you are saying. I always find it interesting when people try to avoid professionals to get a “professional” opinion. Not to say that CyberHomes and Zillow don’t do a professional job at trying to put together a quick home value estimate, but it surprises me when people look for information like that without consulting someone “in the business.” At the same time, shouldn’t agents and appraisers be more vocal about encouraging people to use their services for an accurate home value report?