What to make of Estimates from Home Valuation Sites?
by Pat Melfi
If you are like other jittery homeowners trying to sell their homes, you must have consulted several home valuation websites to find out the real value of your home. Some sellers feel pleased to find the estimated value for their homes to be higher than their own estimates. But some sellers are shocked to see these estimates on Trulia and Zillow as they find them to be lower than their own calculations. How should you look at these estimates when trying to set the price of your home in northern Utah?
Arriving at the value of a property is far from being an exact science. Although the attempt of these websites is to help buyers as well as sellers in their real estate transactions, they are merely adding up the numbers to arrive at these values. They take up the purchase price of the property and the property tax paid by the owner to calculate the estimated home value. However, it is easy to spot the differences in two homes lying adjacent to each other even though they may have same estimated value on Zillow or Trulia. One house may have been purchased much earlier and it may have tax rate adjusted several times if it is sold few times.
You must also realize that property taxes increase or remain stable depending upon market conditions. But you may be surprised to know that you are paying much higher property tax on your home than an elderly couple living next to you. What is more surprising is the fact that your home may still not be worth more than their home and you need to undertake costly upgrades to match their home value.
How do real estate sites arrive at estimates of home values? They tie up with title companies like First American to get down to the tax data sourced from County records. They also become members of major multiple listing services to get knowledge of recently sold properties. With the help of the sale price and the tax paid to the authorities, these home valuation sites arrive at estimates by applying their own secret algorithms. This is how they claim to know the value of a home in any given area. Despite all their hard work, these estimates are sometimes inaccurate. This is the reason why you should not rely completely on these estimates and always ask for a CMA (Comparative Market Analysis) form your realtor.
It is always a good idea to hire services of a local, experienced realtor if you are interested in buying or selling a home.