When considering purchasing or selling a home, many of us jump online to get an idea of the property’s price. These online home valuation sites are convenient and easy to use—but are they accurate?
In short, not really. While sites such as Zillow, Redfin, and Realtor.com can potentially provide a ballpark number, their error rates can be significant… up to 6.9%. There are several reasons for this:
- Proprietary Algorithms. These custom formulas do provide general information like square footage and the number of bedrooms and bathrooms. However, what’s not captured are important factors such as recent updates or remodels, the layout of the home, defects such as foundation cracks, and housing turnover rates.
- Database Collection. While your goal may be to obtain a fairly accurate home value, online estimators may be more interested in building their database (and potentially selling your information to others) than helping you with your research. If this is the case, they’ll use minimal effort to input correct data.
- Information Disclosures. Some states, such as Texas, don’t allow public access to the prices of completed home sales. Since most online services rely on this information for their calculations, the estimated price displayed could be unreliable.
While these sites can provide helpful data, they can’t replace an experienced human being who can see the property and understand the nuances behind value. So before you drop the idea of that dream house because it’s well over budget—or you decide to sell your house based on the amazing online estimate you got—consider getting a more accurate number from a real estate agent or an appraiser.
When the time is right...
When you’re ready to find your new home, we’re here to help. Give us a call (866-923-3222). We’ll get you pre-approved and verify the accuracy of the appraisal to ensure you’re not overpaying. Together, we’ll find the right loan solution to get you settled comfortably so you can focus on enjoying your new home.