My clients are always asking me about the accuracy of their “online evaluations”. After reading several articles about the least expensive home in San Francisco (16 De Long Street offered at $350,000, I decided to pull up various online web portals that offer price estimates to see what their predictions were. It was listed for $350,000 and sold for $408,000 after receiving multiple offers! It was listed for $350,000 and sold for $408,000 after receiving multiple offers!
Here are a few screen shots from various websites showing their estimates for 16 De Long Street, San Francisco, CA:
ZipRealty:
The moral of my story is if online valuations were even close to accurate, the banks wouldn’t request a bank appraisal for their mortgage loans. Also, if online valuations were accurate, you wouldn’t need an appraiser’s license either, you could just attend a webinar and call yourself a professional.
For example, Zillow.com shows their margin of error for their Zestimates. You should check out the accuracy they claim in your market area. You will see that here in Idaho, they give themselves only a 1 out of 4 star rating since they admit “ = Tax assessor's value, or unable to compute Zestimate accuracy”.
Please take online valuations with a grain of salt and dismiss price per square foot analysis while you are at it. You really need to look at the type of property, it’s condition, if it is currently the highest and best use for the property, factor in the depreciation and determine cost benefits of remodeling, etc. to determine the market value based on all of the above!
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