Nine times out of ten people check their home value on Zillow or Trulia prior to calling a real estate agent. I personally think these sites are great considering they get it right about 50% of the time. Even more so, when you consider that an algorithm is trying to determine a very complex ordeal such as the value of a home, so props to them!
Why do they miss the mark the other 50% of the time?
I don’t really know, and I doubt anyone else truly knows, but here is my educated guess: Because they can only see what’s on the outside of the property through the eyes in the sky – aka satellites – and they can only analyze what can be found on public records such as number of beds, number of baths, square footage, etc.
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Therefore, the two reasons Zillow gets home values right half the time are the following:
1. Often, public records are incorrect
This can happen when updates, such as expansion, added bathroom or bedrooms, that are yet not recorded in public records.
For example, say you added a family room to your property. You may have expanded to the covered patio to do so. This adds more value to your home since the living square footage under A/C has significantly increased. But this information will most likely not be reflected on public property records, which is where these sites get their information. Therefore, the lack of accurate information can distort what’s reported in sites like Zillow.
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2. These sites can’t see the interior of your home
These sites can only determine the value by the exterior and what has been sold in that neighborhood in recent years. Therefore, if your home has interior upgrades, or modifications that would significantly add value to the property, it would not consider these factors.
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Property appraisers give little regard for updates to the property. The most accurate way to asses the value of your home is by square foot and room/bath compared to those that have sold with similar attributes. Also, please check your facts because you don’t sound like a statistician. 9 out of 10 and 50%, please don’t just throw these figures around because that is what you are doing.
Please stop trying to make realtors sound like they know what they are talking about. It won’t be long before we don’t need them anymore to close on homes. A monkey can become a realtor.
HI John, the stats am talking about are not inaccurate. Zillow themselves are offering $1,000,000 to whom ever is able to improve their home estimate algorithms.