Are Online Price Recommendations On Target or Worthless?

By
Real Estate Agent with Coldwell Banker, 170 N Main Street, New City NY 10956
https://activerain.com/droplet/hYQ

Are Online price recommendations on target or worthless?

With all the on-line websites that are out there buyers and sellers using the Internet now have easy access to listing and sales data about homes everywhere in the country.

Price is RIght

Savvy sellers can access sales data online to find out what specific homes in the neighborhood have sold for and come up with an estimated value for their home.  How accurate are these estimates and do they replace the real estate agent?

If you live in a condo or development where your house is just like any one of a dozen others on the block the estimate you get based on others that have sold recently may not be spot on, but it's at least highly likely to be in the ballpark.  But even then there are lots of things that can skew what you think is a perfectly good set of comparables.  Here are some things that will effect their accuracy:

  • Home improvements which are not reflected in the county records.
  • A neighborhood made up of very diverse homes where the value of one is not indicative of another.
  • A neighborhood spans two school districts where one is highly preferred over the other but the comps of recent sales in the area don't differentiate between them.
  • A neighborhood borders one that is far inferior in value but because of its proximity the recent sales there have been used as comparables.
  • A neighborhood is a densely populated area and many of the homes within even a half mile are not comparable.
  • A neighborhood is a sparsely populated area and the only true comps are much farther than a mile away.
  • Some of the comparable homes are short sales or pre-forclosures.

In general, the price recommendations of the on-line websites are self generated estimates done by a computer.  It  takes the description of a home from public records, taking into account only data which is recorded and comparing it to others via size, age, area, location and description (how many bedrooms, bathrooms, square footage, etc).  If the homes in the area are similar and the sales activity in the area is steady and the public data is up to date, the comps may turn out to be real comparables - or not.

A computer has no way of knowing what the property's condition is, what updates have been done, whether the purple color of the living room walls will be a turn off to most buyers, or whether the property is a short sale or possible forclosure. 

To get the most up to date and accurate information you need a local real estate agent who is familiar with the homes in the area and what they have sold for. A real estate agent will be able to tell which homes are good value and which aren't, which are true comparables and which aren't.  A real estate agent will know firsthand what the market is doing and what a qualified buyer is ready willing and able to pay for a home. 

So in answer to my original question "Are Website Online Price Recommendations OnTarget Or Worthless?", they're a great reporting tool to let you know which homes have sold and at what price.  But for an accurate picture of comparables and pricing, nothing beats your local area expert real estate agent!!

If you're thinking of selling or buying a home in Suffern NY or anyplace else in Rockland County, as an area local expert, I'll be able to help you find those true comparables so that you can price your property to sell.  Give me a call.

 Flickr photo by kcadams

 

Posted by

Lora "Leah" Stern - Your Rockland County, NY REALTOR of Choice - (914) 772-4528

Your Rockland County, NY Real Estate SpecialistLeah Stern Signature Photo

Lora "Leah" Stern
Real Estate Salesperson
Coldwell Banker Residential Brokerage
(914) 772-4528 CELL
(845) 634-0400 OFFICE
(862) 345-2463 FAX

If I can assist you in any way with your real estate needs in Suffern, NY Rockland County or the surrounding areas, please feel free to contact me by phone at (914) 772-4528, email me at Leah.Stern@cbmoves.com or visit my website .

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Scotti Jowers 09/02/2011 07:18 AM
Topic:
Home Selling
Groups:
30 Days In September 2011 Localism Posting Challenge
Advice for Sellers
Almost Anything Goes
Buyer Information - What Buyers Need to Know in Today's Market
The Lounge at Active Rain
Tags:
home pricing
pricing to sell
finding comparables
suffern ny homes
online pricing
rockland county ny homes
leah stern realtor

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Rainer
203,129
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

Even the people who publish the information state that it is wrong close to 80% of the time, so there you go.

Sep 01, 2011 04:55 PM #5
Rainmaker
570,426
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA
Leah....I agree, they are an okay starting point but there are so many variables. In some towns in may area, values vary greatly among neighborhoods that even border each other. The computer does not make that distinction. Sometimes appraisers unfamiliar with the area cannot make the distinction either, unfortunately.
Sep 02, 2011 12:53 AM #6
Rainmaker
504,451
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Kathy, you're just confirming what we already know - that a CMA by your local expert is the best estimate of value you can get.

Mary - Is the percentage rate of error that high?

Christine - so true.  It becomes really problematic when the aprraisers get caught up in the same inaccuracies.

Sep 02, 2011 04:51 AM #7
Rainmaker
1,308,298
Lorrie Semler, REALTORĀ® in the Dallas area. Call/text 972-416-3417
United Real Estate - Addison, TX
Real Service. Real Results. Real Estate

Worthless in Texas because this is a non-disclosure state.  You need access to MLS to know what properties have sold for.

Sep 02, 2011 05:39 AM #8
Rainmaker
274,392
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

More often than not, as Lorrie pointed out for TEXAS, they are useless. I looked up family member's house on ZILLOW because they told me their house was worth about $50,000 more than I thought it was and sure enough, it was listed just as they said.  They had no explanation as to why the house across the street was larger and listed in Zillow's Zestimates about about $110,000 below their house other than, I'm sure that value is wrong...how can that be right! LOL!

Sep 02, 2011 06:24 AM #9
Ambassador
1,097,032
Robert Hammerstein -201-315-8618
Christie's International Real Estate - Hillsdale, NJ
Bergen County NJ Real Estate

Leah - Another reason why you should always hire a professional to price your home to sell it competitively in the current local market. We all have run into customers who pull out there cells and have the zillow or other app on there phone and think that is all there is to it.. But we know better don't we... Great post and congrats on the feature. Hope you are drying out up there neighbor...

Sep 02, 2011 06:31 AM #10
Rainer
62,881
Scotti Jowers
CENTURY 21 Shackelford French, Search West Monroe Homes - West Monroe, LA
Realtor - West Monroe, Louisiana Homes for Sale

Leah,

Excellent post! "To get the most up to date and accurate information you need a local real estate agent who is familiar with the homes in the area and what they have sold for." You definitely hit the nail on the head with this statement! Thanks for sharing!

Sep 02, 2011 07:15 AM #11
Rainer
232,759
Bob Zorechak - ABR, GRI, e-PRO
Keller Williams Realty Metropolitan - Morristown, NJ
Sells Homes in Morris/Somerset/Hunterdon Cos., NJ

They haven't made software good enough to provide a true and accurate estimated value in my opinion.

Sep 02, 2011 07:18 AM #12
Rainmaker
316,612
Sandy Acevedo
951-290-8588 - Chino Hills, CA
RE/MAX Masters, Inland Empire Homes for Sale

I say , worthless. They are teaching computers many things, but selling a home is not chess. Maybe someday it will happen, but for now....nope.

Sep 02, 2011 09:16 AM #13
Rainer
464,153
James Loftis
RealEstate911.com - West Palm Beach, FL
RealEstate911.com

The online sites such as Trulia and Zillow can only give you a ballpark price on any home. To get an accurate value on a property I would recomend speaking with a realtor in the properties locatoin.

Sep 02, 2011 09:31 AM #14
Rainmaker
504,451
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Lorrrie - That might be a blessing in disguise.

Ron - They take their info from public records which are not always updated in a timely manner.

Hi Bob and Lisa - these online sites price without seeing the inside of the homes or knowing the condition.  I'm finding that they are making our job a tougher one.  We need to undo the damage of their misinformation before we get down to the business of selling ourselves.  Hope you've dried up by now and that you didn't suffer any damage from Irene.

Scotti - Nothing takes the place of a local expert!

Bob - RIght on!  I fully agree.

Sandy - So much of selling and buying a home is emotional and visual.  Computers haven't gotten that down pat yet.

James - Exactly my recommendation!

Sep 02, 2011 09:48 AM #15
Rainmaker
810,313
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Leah:

What you say is so true.  I have been tracking my Mom's home on Zillow.  The Zestimate is lower than comps in the area.  A local expert knows the market and can give a very accurate estimate of a home value. 

Sep 02, 2011 01:17 PM #16
Ambassador
1,655,300
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Leah these online estimates are a starting point, it would be wise for a consumer to make contact with an agent who knows the market.

Sep 02, 2011 02:13 PM #17
Rainmaker
929,011
Debbie Walsh
Shahar Management - Middletown, NY
Hudson Valley NY Real Estate 845.283-3036

Leah congrats on the feature.  Very well said my friend!

Sep 02, 2011 03:06 PM #18
Ambassador
2,011,643
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Leah - You've done a great job of outlining the pros and cons of online pricing programs.

Sep 02, 2011 04:15 PM #19
Rainer
240,350
Janet Jones
Just Your Style Interiors, LLC - Kihei, HI
Home Staging, Interior Redesign Kihei, Maui, Hawaii

Leah--you are so right.  These computers can't take into account things like ocean views or even ocean-front locations.  I see this all the time with estimates on Maui. 

Sep 02, 2011 05:04 PM #20
Rainmaker
504,451
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Evelyn, they are so seldom accurate because they just don't take into account too many of the variables,  We're still the local experts,

Jennifer - As agents, we know they're only a starting point.  Now, to just get that point across to all consumers.

Debbie - Thanks,my friend.

Christine - More cons than pros, I think.

Janet - that's especially true when only one side of the street has the views and they comp it to sales on the whole street without taking this into account.

Sep 03, 2011 02:24 PM #21
Rainer
66,298
The Elise Bickel Team
ReMax Select Realty - Pittsburgh, PA
Leasing, Property Management and Sales

Prices are way off here in Pittsburgh. We have a county website that gives estimated values but it is assessed value and not selling value...so usually a home says $130,000 is really worth $175,000-$200,000. Plus sites like zillow etc are always way off. And then zillow tries to comp a home but takes no account on what is important to an area. For example, to not have a garage in a low income area where no has garages isnt a big deal but in the suburbs where a minimum of 2 garages is a must, then having only 1 will seriously affect value.

Sep 09, 2011 12:25 PM #22
Rainmaker
602,816
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

I've been watching the zillow zestimates on my listings. What I've noticed is if I reduce the price the zestimate is then lowered. I have also used the zestimates to my advantage with appraisers. If the zestimate is higher than the contract price I include the zestimate with comps I give the appraiser.

Jan 02, 2013 09:58 PM #23
Rainmaker
504,451
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Mitchell - Great idea to include the zestimate with comps you give the appraiser if its higher than the contract price.  I think I'll borrow this one from you.

Jan 05, 2013 02:26 PM #24
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