Inside Real Estate “How Accurate Are Online Valuations?”
Everybody’s favorite hobby it seems is to go online and see what their home is worth on Zillow, and Trulia, Realtor.com, and Redfin. The question is, “How accurate are they?”
There is no question their accuracy has improved. Recent sales indicate that they are coming in within 2 to 4% of the sales price in a lot of cases, so that is pretty good. But you have to understand it is an algorithm. It is a mathematical formula that takes data points and analyzes those data points to arrive at a value.
Real estate inherently does not lend itself well to an algorithm, especially on the higher-priced homes. If you are selling a condo where there are 17 of the same floor plan that sold in the last six months, pretty good bet that the online valuation will be pretty close. If you are selling a luxury home, one of a kind with views, a lot harder to put that into an algorithm. Many of the elements of the higher-priced homes just do not lend themselves to an algorithm. They include view, privacy, amenities, lot size, usability of the lot size, floor plan, neighborhood, and interior condition. These things are essential to the value of luxury homes, and they also happen to be the hardest things to put into an algorithm. So as you go up the price chain, the online valuations get less and less reliable.
Now, we have an online valuation tool at 680homes.com that we feel is pretty good because you can pick and choose the sales you feel are more comparable to your property. If you visit 680homes.com and click on Instant Home Value, you will get a chance to see how that comes out for your property. We certainly invite you to do that.
In summary, online valuations are fun. They are fun cocktail party talk. It is fun to track your value, but when it comes time to sell, especially in the upper price ranges, so many of the value indicators are not quantifiable. That is really where you need a realtor to come out and give you an idea what the market value range of your property would be. If we can help you, or any of your friends, give us a call at (925) 785-7777, or visit our website at 680homes.com