My friends, in this web crazed era more and more buyers, sellers and I hate to say even agents, are using online valuation tools to help them come up with what to list and sell your home or property for. This is a horrendous mistake! Why? because the algorithms for ALL web based home valuations found on any web site are highly inaccurate!
The valuation tools have a tendency to blend neighborhoods, fixers, foreclosed properties etc into their valuations. Say you live in a newer subdivision with larger sized homes that has an older subdivision with smaller sized homes right next to it. What does that do to your online home valuation? It pulls down the newer subdivisions prices while inflating the older subdivisions prices.
Say you have two homes, each of them the exact same size near each other. One sits on a much larger lot and has a pool and the other sits on a much smaller lot with no pool. What does this do to the online valuations? Once again it pulls up the house with the smaller lot, while it pulls down the value of the house on a larger lot.
See the issues home valuations cause?
An old client of mine wants me to sell their home in Marysville, I went to look at the comparable properties. Sure enough, a listing agent listed a home slightly larger then his for $112 a square foot and its not a fixer! Everything else in the area is listed or has sold for not less then $140 a sq foot. So on a hunch I go to Zillow to check out what this agent was thinking and “Oops there it is!” The listing agent has the list price at almost the Zillow online valuation price! I calculate that this seller, by choosing the wrong real estate agent who does not know how to value property correctly is going to lose over $40,000 in the sale of their home.
Please, do not give any weight to web based valuation programs, and make sure that your agent doesn’t either for you will live to regret it. You will either list your home way over the market and it will take forever to sell your home and you will actually end up selling for less down the road, or you will so under price your home that you will leave thousands of dollars on the closing table when you sell.