Further Thoughts on Online Home Price Estimating Websites
My attention was recently drawn to an intriguing real estate story that appeared in The Washington Post.
It relates to a law suit filed in Illinois by a homeowner against one of the biggest online home price estimating websites.
In essence, the basis of the suit is that the estimated price of the home on this site was repeatedly undervaluing the homeowner's property, to the extent that it created a "tremendous road block" to its sale.
The Washington Post says this is the first suit of its kind and there's even a chance of it being turned into a class action suit, which could involve millions of owners across the country...
The suit alleges that the method of appraisal doesn't meet the state definition of an appraisal and that, furthermore, the website owners should be licensed to perform appraisals before offering such estimates, as well as seeking the consent of the homeowner before online posting of the estimate.
While it is clearly inappropriate to comment on the specific details of this case, it does bring to mind a point I've previously made in this blog that these websites shouldn't be taken too literally, in terms of the accuracy of the estimates they provide.
There's a lot of anecdotal evidence of prices that are both over optimistic and, as alleged in the case above, undervaluing property.
I think the central issue is how seriously the person acquiring the online estimate takes the price that's given. These valuations can still be of use in terms of providing a very loose "ballpark" figure for general guidance. This might be especially useful, for example, if you've not looked at your home’s market value for many years.
But nothing can replicate the accuracy of visiting the property to inspect physical condition, features and facilities, plus having intimate knowledge of what's selling in the local market, for how much and, indeed, fully understanding all the contributing elements to arriving at the correct price point.
This is where a professional agent comes into his/her own and can arrive at a home price that takes a lot of things into account that a generic online home pricing computer calculation simply doesn't have access to.
So while we'll all watch the progress of the Illinois law suit with interest, my advice remains to always contact a reputable agent and to not be surprised if the price he/she gives is either North or South of the estimate you've seen online.
Why not contact us today for a detailed and thorough valuation of your home.