Don’t Obsess Over Online Home Valuations

We live in a world where information is readily available at our fingertips anytime we want it, day or night. This information includes real estate listings and online home valuations. Web sites like Zillow.com, Cyberhomes.com and others offer a lot of information, often through dramatic interactive maps. And they can help prospective buyers tune into a neighborhood’s real estate trends, such as which nearby homes have recently sold – and for how much.

For many homeowners the home value estimates keep them coming back to these websites. The sites are packed with so much information that some homeowners end up taking the estimates a bit too seriously. This is a big mistake.

The valuations at these sites have been known to be off by as much as 10-20%. They use computer generated valuation models to come up with their estimates. The information is pulled from tax records and previous home sales in the area. The problem with this is that information being used can be innacurate and no two home interiors are identical. Even in cookie-cutter communities where homeowners have a certain "model", interior finishes are a matter of taste and have a big effect on pricing. Some homes will have more upgrades than others. The computer will not know this to take it into consideration. So even though you and you neighbor have the same model, actual values can vary.

Also, tax record information on a property may be innacurate. It may not take into account home additions or remodelling that was done. It may list the home as a 2 bedroom when it is actually a 3 bedroom. Again, the compuer valuation model will be off by a high percentage.

The bottom line is that every homeowner loves knowing what their home is worth on any given day. The online valuation sites are a fun way to get an idea of a neighborhood's value. They will never be as accurate as we want them to be. When you take away the human element, you get a computer generated value. This cannot be relied upon to make decisions about your home.

If you really want to know what your home is worth, stop "zillowing" it. Call a local Realtor who knows the neighborhood or pay for a professional appraisal. Then you know you are getting good information.