Can't figure out how much your home is worth in this market? Pulling your hair out? There certainly are lots of resources to help IF you know how to use them...
Let me state upfront that I am a big fan of Zillow and some of the other online appraisal sites. They can be a great tool for homeowners (and buyers) during the early stages of the home selling or buying process. But they do have their limitations and so a consumer must be careful when utilizing the information provided on those sites.
The Boston Globe recently put several of the sites to the test. They tested the online appraisal services as well as a human appraiser and several real estate brokers to see which was the most accurate. By taking a home that sold less than a year ago, they compared the actual sale price to the estimated values from the online sites and from the real estate profesionals. Full article: Ready to make a move?
Obviously the test is not perfect, since the home will not have the exact value it had nearly a year ago, and without actually putting it on the market and having a seller and a buyer reach agreement about a price, we can never know the "true" current value. However, it was interesting to see the variation in the value estimates. By far the highest estimates were the computerized estimates:
The condo used to test the services was purchased for $329,500 less than a year ago and its tax value is listed as $353,300. It is not currently on the market.
The four online services estimated values ranging from $305,700 to $417,200, with the bulk of the values between $350,000 and $370,000.
The appraiser gave a more precise and pragmatic estimate: $332,000, just above the last sales price. Three realtors who were independently consulted and saw the home also estimated its market value at $325,000 to $345,000. So the Internet services seemed too high to be realistic.
With all the variation in the market from town to town and even street to street in some areas, it is very difficult for the Zillow's of the world to create a perfect formula for calculating value. I have seen properties that are just about identical in specs but selling for considerably different prices just because of the difference of being on one street vs the next street. Only a local expert would know the difference. Especially without seeing the inside of the property and other properties in the area, it is nearly impossible to come up with an accurate value. They get you in the ballpark though, and that can be very useful for an idea when thinking about the decision to sell.
