The growth and ubiquity of the Internet sure has made it more fun to shop for a new home or compare your home to others in your neighborhood. Right?! We all enjoy perusing the photos and features of drool-worthy kitchens and palatial master suites. However, in many ways the Internet has not served home shoppers and sellers well. Not to mention, it’s made my job as a Realtor® and a Certified Pricing Strategist a little more challenging when it comes to educating sellers and buyers about home prices. That’s right, I’m talking about the Zestimate and the misconception it creates about a properties actual market value. That’s not to say that online valuation tools are not useful; however, they need to be used cautiously and in context. Here are my top three pieces of advice to keep in mind that will help you make the best of these tools when looking at home values:
- Use online home valuation tools as a starting point. Using websites like Zillow and Trulia to learn about the general range of value for your home or a tool to start looking for a home to purchase is a great idea. Just remember to think of the valuations as a very general starting off point and remember that even according to Zillow, their prices error plus or minus 5%—see chart below. Buyers, it’s best to use these sites to narrow down the general areas and general neighborhoods where you want to look for a home based on your budget.
- Use multiple sources to get a better picture. Once you’re ready to dig into a home’s valuation a little deeper, consult more than one source to begin to get a clearer picture of a home’s true value. For example, take a look at another home valuation website like Trulia.com as well as the MLS, by using a site like Realtor.com. On Realtor.com you can even find actual sales data for comparable properties. You’re likely to get a better, more complete picture of what a home’s worth; however, remember it’s still not a true analysis or appraisal.
- Consider a home’s specific features. Even after you’ve done all the research I’ve mentioned above, keep in mind that none of these algorithms, search engines, or data miners can figure in—yet, anyway—the specific features of a property that will undoubtedly effect its value. For example, the value will certainly be affected if the lawn is trashed or landscaping not maintained; or consider the gorgeous kitchen remodel or finished basement; or the busy street. These are just a few items that online valuation tools can’t capture and adjust the value for.
With these tips in mind you can use the online home valuation tools, like the Zestimate, for what they’re intended; as a general guide to beginning your new home search or preparing to sell your current home. And when you’re ready to get the actual value of your home or begin shopping for your next home, give me a call. I’d be happy to put my Certified Pricing Strategist skills to work for you and show you how we put together a complete home valuation analysis.