June 29th, 2014 11:06 AM by David Massey
Sources of Value
website states my home is worth $X!” In both my Real Estate Appraisal and Real
Estate Brokerage business this discussion happens on a weekly basis.
brokerage side when we receive very low offers, I check these Internet Sites
and see if the offering is based on one of these websites. Often they are the
same. As an Appraiser, the debate will arise if there is an appeal of the
appraisal report’s market value. “But the Internet states my home is worth much
more than your appraisal.”
Let’s look a
little deeper into these third party websites that offer estimates or
guesstimates. While I admire the effort to educate consumers, the variables are
far too vast for these websites. I will admit that sometimes they are pretty
close to correct, but not often.
simplistic explanation for the inaccuracy is the old saying I learned in
Computer Science 30+ years ago is GIGO, Garbage in, Garbage out. These sites
pull data from a variety of sources. Tax records, public records, sometimes
Multiple Listing Data and whatever sources they can manage to gather data. The
problems I see more often than not are incorrect square footages and inaccurate
room counts (bedrooms, baths and so forth.) Their algorithms simply will not
work without accurate data.
Last week I
appraised a 1,700 Square foot ranch with an unfinished basement at $160,000.00.
The Room Count was 7 Total Rooms, 3
Bedrooms, Two full baths and one half bath. As a matter of checking myself, I
glance and see how close my square footage calculation matches the MLS sheet,
tax records and yes sometimes I even check out these popular websites.
I did with this
house and was amazed at what I found. One website stated the house had 10 Rooms
4 baths and 3,400 square feet! The “estimated” value was over $300,000.00!
3rd party sites are interesting, I certainly would not rely on them
for an accurate market value of my home. I do see more potential with these
sites at seeing what is on the market for sale around your home. If the data is
accurate this helps to see what your house would be competing against in the
accurate market value, hire a Certified Appraiser that is familiar with your
market. I am doing more pre-listing work for Realtors and Individuals than I
have in the past 30 years.
Perhaps these third party sites are helping my business!
State Certified General Appraiser – NC