Real Estate Advertising Portals - An Instant Valuation That May Hurt Your Sale
Many of us in the industry have been aware of and watching an online war between one of the major online real estate advertising portals, and nationwide real estate brokerages pulling their listings from these portals due to incorrect property information or worse yet finding that even several months after closing the properties are still being advertised.
There is resistance to your property for sale, being sold to agents as a method of capturing leads from potential buyers who know nothing about your home. One of the biggest problems is the agents buying the advertising may not even be local. For example a Barrington advertising spot, where your home will appear, is sold to an agent whose office and home is miles away, like Chicago or Naperville. Regradless of how little they know about your home, they don't even know how to get here, let alone anything about the Barrington area.
The purpose of this post is to take a look at these sites in relation to their automated valuations, offered simply by entering an address, to anyone that cares to do so. Could this possibly hurt your home sale? Is it the reason the only offer you got was a lowball offer? Is there anything you can do about it? Many of the online real estate portals have information about your home. It doesn't even have to be for sale. A curious browser can type in your address and get an instant valuation. Now consider if your home is for sale. A curious buyer types in the address and gets an instant idea of what your property is worth-according to the sites algorithmic calculations. It's less than you are listed for but the buyer is interested. As a buyers agent my job is to show value based on comparable sales. Maybe you are priced well and maybe not. However in the back of the buyers mind is that automated valuation and if it's a long way from your listing price it is extremely hard to get that buyer to discard that information. They read it, and we don't have an erase button. In a buyers market it's fuel for buyers, they think!
Now you have a battle on your hands. Your Realtor is standing by your asking price based on the analysis they did. The buyers agent is standing by their analysis and you could strike a deal. Yet both Realtor's are arguing against an automated valuation method which is sometimes close but as often as not is nowhere near on target.
The difference is your Realtor is using the correct methods to determine value, and that computer system, well who knows what that uses and how often it is changed, but it's neither a licensed Realtor nor is it an Appraiser. Sellers do not use these automated valuation methods in determining asking and sales prices and nor should buyers. Ask a Realtor!