The estimated value of my home on
one popular, third-party website is very low, less than the value of other homes in my neighborhood. I’m planning to sell my home in 2013. Will the estimated value of my home on that popular third-party website discourage buyers, or make it difficult to get a fair price for my home?
— D. S.
Among third-party websites, the most popular are Realtor.com,
Zillow and Trulia. You can use these websites to search for rentals, find homes for sale, to blog and obtain a free estimate of the value of your home.
Even if you have no plans to buy or sell a home, you’ve probably peeked at the value your home or a neighbor’s home.
I confess, I look at the estimated value of my own home on third-party websites. I also review the estimated value of my clients ‘homes on third-party websites so that I will be informed about the estimated value of my listings published on the Internet by the various websites. Frankly, the listed price rarely matches the estimated price.
The Realtors’ job becomes more challenging when the estimated value is significantly less than the real market value. Some buyers expect the agent to justify the listed price if it varies much above the estimated value. (Of course, buyers never complain when the estimated value is higher than the listed price!)
The data shows that 98 percent of homebuyers begin their search for a home on the Internet. Most people like the third-party real estate websites, which offer free information and estimated home values.
Although the Internet puts a world of information at your fingertips, there is also a lot of misleading information, inaccurate information, omitted information and even outright fraud on the Internet.
An estimated home value is created by an algorithm that collects data from public records, Realtors and multiple-listing associations and combines it with information about market trends. The information is impersonal and frequently incomplete.
For example, estimated values work best in neighborhoods where there is a lot of turnover. The high-turnover neighborhoods (less popular, prompting more sales) would have more accurate estimated values because of the high volume of sales, while the low-turnover neighborhoods (more popular, so residents don’t sell as often) would have estimated values that are far less accurate, because there are fewer sales to establish a trend in value.
An estimate is just that, an estimate. A computer-generated estimate of value cannot account for a new gourmet kitchen or a spectacular view. Estimated values cannot accurately assess consumer preferences for two-story homes vs. mid-entry homes.
Estimated values have no way to measure curb appeal or the emotions of a buyer.
Some third-party websites even allow the homeowner to modify the information and the value of their home, ignoring the computer-generated value.
An estimate of value is merely a tool, and not a very valuable tool for determining the value of a home.
According to a recent study, the Mil-
. ASK RAY, Page 34