Why You Should Take Automated Home Values With a Grain of Salt
Today we’re back with a bit of a controversial topic in the real estate world: the automated home valuation. Websites like Zillow and Redfin have tools that allow you to get an instant value of your home. Should these algorithm-based estimates be trusted?
We get questions about these estimates all the time. While these tools can be handy at giving you a rough estimate, there are some issues that you should be aware of so that you can interpret this data properly. We actually spent over a decade working at Zillow and dealing with Zestimates, so there’s arguably nobody that understands how to deal with them better than we do.
The first thing that’s important to remember is that none of these websites have ever been to your home. That means they don’t have all the information. The condition of your home is absolutely critical to its value, as is its location. Sites like Zillow and Redfin don’t take this information into account.
Secondly, the vast majority of information that these sites collect is coming from county tax records. It’s not just based off your home, but it’s also based off all the information for all the other homes around you. If those numbers aren’t accurate, that can really throw off the value of your home.
Finally, most of these sites use comparable areas that are far too large to pull in similar homes and come up with a home’s value. This makes it very difficult to come up with an accurate value. They use mile wide zones to compare when it should be closer to a quarter mile.
This topic is something we know a lot about and if you have any questions about pricing your property or about the real estate market in general, don’t hesitate to give us a call or send us an email today. We look forward to speaking with you soon.