Over the last few decades, the Internet and website portals have changed much about how we live our daily lives and how we make important decisions. More than ever, an abundance of information is available that allows us to research so many things. Depending on the industry involved, it can range from being wonderful and helpful to being overwhelming and difficult to sort through.
That is certainly true when considering residential real estate and contemplating a move. Real estate websites abound. Brokerages and individual agents have “search” websites. MLS listings spiral out to real estate websites such as Zillow, Trulia, Realtor.com and hundreds of other syndicated real estate sites. Buyers are getting a sense of what is available in any particular area and sellers look to compare their home to others. Especially in the early stages, being able to search for properties and take a ‘virtual look around’ is a great way to start the process.
What about those automated “estimates of value” offered particularly by syndicated real estate websites?
1) How do they arrive at their values?
2) How accurate are their values?
The online values are based on algorithms. The formulas can take into consideration a home’s physical attributes that are obtained from “fields of information” from both public and user-submitted data, tax assessments, and home sale prices within a reasonable proximity. But because those formulas and algorithms can’t “see” other things, like effective versus actual age of a home, a particular home’s condition, or other critical differences that affect value, they offer an ”estimate” with a very large range to account for margin of error. The range is quite wide and often as much as 20%. Algorithms are great for determining trends, but when it comes to determining a particular home’s value, these sites offer disclaimers and correctly encourage sellers or buyers to get independent valuations from LOCAL PROFESSIONALS.
Why is a personal home visit from a professional important? Here is an example: An algorithm can factor two homes in close proximity, built at the same time by the same developer in 1989 that are of similar size and have the same number of bedrooms and baths. But it can’t “see” that “10 Main Street” was never updated and significant capital repairs and updates are long overdue. On the other hand, “20 Main Street” just a few houses down has had major systems and structural elements updated and repaired (heating, cooling, furnaces, roof, siding, windows) and has had interior remodeling within the last few year with new kitchens, baths, flooring and décor giving it an “effective age” of 2018. Big difference in value? Most certainly. The online estimate would miss the mark substantially for both properties, or be very apart even if when a range. It is typical that an online “estimate” is either too high or too low. A real estate professional can factor those differences and provide a much more finite value or narrow value range for either of those homes.
There is another reason “local” experience and knowledge is important particularly when considering Cape Cod properties. Cape Cod is a unique geographical area. Very similar homes can be less than a mile away from each other and have very different values for a variety of reasons that an algorithm can’t easily factor, such as proximity to water bodies whether lakes, ponds, marshes, estuaries, bays or ocean. Does the home have a deeded access vs. a public access? Does a home come with certain conservation restrictions? Is one of the comparative homes in a homeowner’s association with other rights and responsibilities and another not? Is the home in a flood zone? If so, which one? Does it have an elevation certificate? All is important in determining the value of each and every property – but not something that algorithms can accurately achieve within such a diverse area, but factors a local professional would consider.
Something to consider: If researching medical symptoms online, WebMD can be a great initial resource. But when it comes to something as valuable as your health, wouldn’t you also consult a local medical professional to verify if what you learned was accurate and applicable to you? The same applies to real estate properties. Sellers should seek professional advice when valuing what, for most people, is among their most valuable assets.
Contact SHIRLEY BAHLER - experienced, knowledgeable, trusted.
Just “thinking” about selling and moving? A “Comparative Market Analysis” is critical in making realistic plans. Put my 3+ decades of real estate experience to work for you along with my familiarity with Cape Cod towns, villages and neighborhoods – my LOCAL KNOWLEDGE. I’d be happy to provide a FREE NO-OBLIGATION home valuation report for you. And also to answer other questions you may need or want to consider when you are making plans.