One of America’s favorite participant sports is checking the value of one’s home on services such as Zillow.com and Trulia.com — the variations of which were discussed in my story in Friday’s Herald-Tribune.
These computer-determined values can elicit smiles of gratification or snickers of disbelief, even jealousy. “No WAY is the neighbor’s house worth more than mine. It’s like a barn in there,” it most likely has been said.
You can always try a competitor’s website; the field is competitive, as these sites vie for consumer eyeballs and advertiser dollars. Homes.com, a relative newcomer, is one such alternative.
You might get a value you like better, but don’t expect a miracle. All of these websites face a major challenge, says Bryan Guentner, broker of RE/MAX Platinum Realty in Sarasota.
“It is useful when you are comparing homes in the same subdivision, or condos in the same condominium complex,” said Guentner. “But the computer hasn’t seen the inside and doesn’t know the upgrades, or the land.”
Dan Gaertner, vice-president of technology at Homes.com, which has been doing valuations for four years, says the biggest factors in his company’s valuations are tax assessments, city-county sales records, active listing prices and price trends.
“We are constantly looking at ways to tweak the values,” he said. “In certain neighborhoods and cities, they will be more accurate than others. We are depending on county records. For the most part, we are within 5 percent. We can tell, once they come on the market, how accurate we were with the estimate. The list price usually comes on a little higher than the estimate.”
“There are things we cannot see in county records. Did they put in a pool? Did they put in granite counters? Did the neighbor’s house just sell and hasn’t been posted to the records yet?
“The agents have to do their homework. The agent has a knack for the homes in his area.”
Gaertner emphasizes that online home values are “a starting point. It is a good way for consumers to find out what their home may be worth before they consult an agent. At the end of the day, home appraisals are expensive. You have to pay from $100 to $300 for an appraiser to give a true estimate.”
Trulia, Zillow, Homes and others offer valuations to drive consumers to their sites.
“It gives us a way to reach out to the consumer that might not be on the for-sale market. Everyone is interested in the value of their home. First-time buyers are really interested — they want to see that their investment is paying dividends.
“Thirty percent of our traffic is based on homeowners checking the value of their home. The remainder is shoppers, for sale or rent, and information on improving and furnishing the home.”NOTEStart
Owners can claim their house and edit information. Update square footage, note improvements. We encourage people to do that because the more information we have, the more accurate the estimate will be. We can send monthly updates on home's value and tips for improving the home. It is a way for us to engage with consumers and bring them back to our site.
Strength is the availability of inexpensive information to go online and get an idea of the value of my home without paying an appraiser $300.
It is hard for a computer to tell that the property is sitting on the water with beach access. That government's house might be surrounded by $1 million homes.
The unique homes are the hardest part. There is such a variance from $47 million to $17 million. For a computer to try to do crowdsourcing in that neighborhood and try to calculate something based on what is for sale and tax assessments, when you get into extreme homes, the variance makes it very hard for us to compute something like that.
When you are in a neighborhood of 600 homes with a history of $200,000 and $300,000 sales price range, it is a lot easier for us to dial in. When you are selling houses on the water for $7 million, $20 million, $30 million, it makes it really different. That is where we rely on homeowners to edit information. We will push you to the local agent to consult with him to get a free estimate of the true value of your home.
