Instant Online Home Valuations
How accurate are the instant home valuations?
Let’s look at what is reported sold as of 4/1/08 in the MLS, La Canada;
5447 Castle Knoll closed $1,400,000 4/15/08
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5311 La Canada closed $1,962,000 04/08/08
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4358 Beulah closed $2,065,000 4/10/08
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4363 Beulah closed $3,260,000 4/11/08
Appraisers drive by comparable properties so they are able to determine the differences in location (busy street, etc). They then adjust the value of the property accordingly. When a Realtor assess a home, the Realtor typically examines the active listings (the competition) and the listings in the neighborhood that didn't sell. Interestingly, the online evaluator, the appraiser and the Realtor each evaluate property differently. Ultimately any home is only worth what a buyer will pay - and a buyer typically assesses the home in much the same way as a Realtor, by comparing to other homes currently available.
I`m a little bit skeptic about the home evaluation methods. As a first-home buyer I should be thoughtful what decision I make and do several researches about the value of the houses. Of course, it`s always better to ask an objective realtor about the scheme but I think somebody should be profoundly aknowledged and be able to discuss it with the professional.
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Phyllis, I must disagree with you that most homebuyers and realtors typically evaluate a home by comparing to other homes currently available;i.e. listing/asking price. In fact most homebuyers are heady enough to want to make sure they are not overpaying and will evaluate a potential home by comparing it comparable homes recent sales prices; hence, the sales comparison approach. I do believe that automated or (on-line)valuations typically provide raw data and lack the necessary adjustments needed to properly estimate "real value". I'm enjoying your blogs thanks very much for publishing them.
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Most buyers do compare homes based on active listings - the other homes which they have viewed. It is easier for them, because they have viewed the interiors. In a declining market it really doesn’t matter what something sold/closed for six months ago.
I do agree with you that the on-line valuations lack the adjustments needed.
Thank you for reading and enjoying my blog.
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