2 of my favorite quotes from the comics; "Good Grief!" is Charlie Brown of Peanuts fames favorite saying. "We has met the enemy and he is us" is from an old comic strip called "Pogo". Pogo was a cartoon opossum and the originator of that saying.
There has been a lot of noise on the net lately about automated home valuation models along with an increase of websites offering them to John Q. Public.
Unfortunately for those that put a lot of stock in these online appraisals they're generally overly broad and very, very often not valid for today's prices in a given neighborhood.
I had a buyer recently I had been sending e mails of listings that nominally met his buying criteria. One day he called and wanted to go look at 3 houses he said he was interested in.
We went and one turned out to be his proverbial dream house. Went back to the office to write an offer and he pulled out not one, not two, but three online valuations of his 3 favorite houses including the one we were fixing to write an offer on.
Good Grief!!
I've never seen such a disjointed batch of alleged comparable sales in my real estate career.
Some of them had used a condo complex just down the street to compare to a single family home in a neighborhood, others were wildly out of the ballpark both ways on suggested values.
After we sat down and went on the MLS to find some valid comparables along with some knowledge I had of those sales, we wrote a successful offer.
The huge flaw with most of these services is that they just pull sales from databases and the programmers have no clue as to where they've told it to look.
They also don't (and can't) factor in nuances we would likely be aware of like sellers paying closing costs for a buyer, redecorating-done or not, property size, and a host of other very important variables.
There's way too much of these so called "instant appraisal" services running around out there.
We need to go a much better job of educating the public and our buyers and sellers about the flaws and limitations of these online valuation guys or we'll be dealing with stuff like this on every sale.
Somehow I don't have high hopes of that happening.
"We has met the enemy and he is us."
Thanks for bringing up the topic, Jim. One of the maladies of the computer age and the Internet: more quantity than quality. Data is not information until it is examined and understood. The more people will be disappointed by the mountains of data and hurt by the miscalculations the sooner the pendulum will swing back to reliance on expert human resources. -- Gerhard
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