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Online Valuation Services Miss the Mark on the "Human Factor"

By
Real Estate Agent with Savvy + Company (704) 491-3310 228209

Online Valuation Services Miss the Mark on the "Human Factor"

Key to online valuation is missing the human factorIt is not uncommon for Charlotte real estate agents to arrive at a listing appointment facing eager sellers who have previously visited an online home valuation and found their home value to be significantly higher than the actual value.  Sellers then question OUR estimated Charlotte real estate values. 

Homeowners utilize several valuation tools provided by a variety of online sources.  It's relatively simple to explain in one word - HUMAN - why it's best NOT to rely on these sources.  You may find one that is absolutely spot-on with the bare data but, I don't believe that a representative from any of these online sources has ever walked through every single sold home in every nook and cranny of the city!  Knowing what upgrades have been done, what layouts are selling and which are not, even what specific neighborhood is comparable to is VERY important data to have to formulate an accurate CMA.

Here are answers to two of the most frequently asked questions that I receive with regards to online valuations.

Q.  Why is the price for which you think my home can sell, different than the estimated home values provided by online real estate sources?

A. Because computer programs set those prices.  Here’s how it works in general.  A computer pulls the description of your Charlotte real estate from public records.   Using that extremely basic information, such as square footage and number of bedrooms and bathrooms, the computer comes up with a price for your home.

Computer programs and national websites, nor their employees will EVER personally visit your home or other homes in your neighborhood to distinguish the differences and similarities (remember the HUMAN factor!).  For example, they cannot see that your home has recently been painted and renovated and is in a totally different development than the neighboring one that is possibly even on the same street, within the same zip code.

Q.  Are there any circumstances in which those computer generated values are at least fairly accurate?

A.  The estimated home values could be in the ballpark if all the following are true:

  • Your home is in a subdivision in which homes are nearly identical;
  • Several homes, just like yours, have sold recently;
  • NO homes are being sold as short sales or going into foreclosure;
  • Your home is relatively new and has not had a major renovations or additions.

While it’s fun to go online to see what your neighbor’s home sold for, don’t use that information as the bottom line, denoting what your home could sell for in today’s market.

If you’d like a free, in-person, professional analysis of what your Charlotte real estate could sell for in today’s market, give me a call or email me today.  No obligation, just ‘real’ information.


For more seller tips and information, visit www.iCharlotteHomes.com.
 
© Debe Maxwell | The Maxwell House Group | SavvyBroker@me.com | Online Valuation Services Miss the Mark on the Human Factor

Comments(12)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Debe I get those questions on the mortgage side also.  I like the responses you gave and need to remember them.

Nov 21, 2013 05:21 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

You got that right.  Even when I use the very lastest comps for a neighborhood at my lake, it always makes a difference in how the people have loved and cared for and updated their homes.  And even my MLS CMA program can't "get" that.

Nov 21, 2013 07:04 AM
Tony Busanich
TD Bank - Freehold, NJ
1-4 FAMILY HOME LOAN SPECIALIST

Debe, great post, i can't agree with you more. the human factor is always the more logical choice.

Nov 21, 2013 08:36 AM
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Debe....The HUMAN factor! Love it! 

It's like when you call Customer Service and you listen to a computer voice, and punch number after number. Really, could a human have not answered the phone, and then directed me to the right department. 

And a computer program will not walk through your house! Indeed!

Nov 21, 2013 08:46 AM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Debe

Your right on target with your insight, the human factor is a big factor in pricing.

Good luck and success.

Lou Ludwig

Nov 21, 2013 08:48 AM
Robert Fowler - 55CommunityGuide.com
President of Retirement Media Inc. - Braselton, GA
55+, Active Adult and Retirement Communities

Debe my experience with the online services are the same as yours.  It can be a nice rule of thumb but they are subject to huge mistakes.  Many times they have even the basic number of rooms or square footage wrong.  Setting the price is too important and potentially costly to a seller to rely on them solely.

Nov 21, 2013 09:29 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

George, Thank you!  I'm so surprised at how this has become a daily occurrence!  

Tammy, BINGO!  You have to have SEEN the properties or at the very least, evaluated the photos or spoken to someone who DOES know the property!  

Tony, thank you!  We're frequently forgotten somehow! ;-)

Thom, Exactly!  Oh, how I hate those systems too - and you're right, this is akin to that!

Lou, Thanks and I can't imagine a time that it won't be!

Robert, You're right - that is one thing that I don't tell them often enough!  I've done research before for a listing and I get there and they say, "Oh, the square footage is wrong in the online records" for whatever reason - could be just a computer error but wrong, nonetheless.  So, that's a prime example of why you CAN'T rely on online values!

Nov 21, 2013 11:48 AM
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

Debe, nearly daily occurrence with shopping listers I would say and unfortunately I am too honest, don't take overpriced homes and usually will lose out on these to agents that will take just to list a home.  It just happened last month on a short sale that was listed so high I am sure they will go into foreclosure which is an utter shame.

Nov 21, 2013 07:41 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

If these valuations were any good, then the lenders wouldn't need to hire appraisers to determine the value of a home, would they?

Nov 21, 2013 09:26 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Ginny, I've seen that too and often wonder how on EARTH someone can let that happen - if it isn't selling, condition and location are ever just 'okay,' it HAS to be the price!  LISTEN TO YOUR LOCAL AGENT!

Gabe, EXCELLENT point!  I have to remember that the next time I'm faced with this!

Nov 21, 2013 10:54 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Debe,

I find it interesting that some want to discount the human factor completely.  This is the time we need it more than ever, in my opinion.  Happy Friday, A

Nov 21, 2013 11:42 PM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Debe - Excellent explanation! Prior to meeting with a prospective seller I always check out some of these online valuations so I'm prepared if they bring it up, which in my experience if I tell the seller their home is worth more I've never had anyone bring these figures up, but if it's less they almost always do.

Nov 22, 2013 12:28 AM