Beware Using Free Online Home Value Websites to Determine the Value of Your Home!

Here is what you need to know that those results do not tell you:
  1. Is the comparable house really there? A computer cannot tell you if the home is actually where it’s suppose to be. Has it been destroyed by a Hurricane? Is it a beautiful mansion, or a small cottage? Sometimes the mapping of a home is off by a couple blocks, putting it in a completely different neighborhood, thus compromising the value calculated.
  2. Does the home have unique features? These features might add to the value of the home, but they can also detract value. Does the estimated value take into consideration the power plant next door, or the proximity to an airport? Are train tracks nearby with trains blowing whistles as all times of the day? Is it located in one of the most desirable neighborhoods because of the school district? All of these can greatly affect the value.
  3. How long ago was the property assessed? Many of the online valuation companies solely rely on public assessment records. In FL, for example, homes are only assessed each time it sells. So a home that hasn’t changed owners for 10 years will have a lower assessed value. Also in FL, Homestead laws only allow the assessed value to increase a maximum of 3% in any given year. This could mean your free online value is lower than it should be.
  4. What determines a comparable property? Online sites “compare” homes that are in the same vicinity, have similar square footage, and sales date, but does not take into consideration highways, school districts, foreclosures, auctions etc. The computer just does not know the adjustments needed to correctly deliver a fair market value. Only a licensed appraiser can do that for you.
  5. Is the market in decline? If your market just burst, where you were seeing record sales, but now homes just are not selling, the online websites will not take into consideration this decline. Days on the Market, current price reductions of existing homes for sale, and number of homes on the market are important parts of any market analysis of your home.
  6. What exactly are the qualifications of that website? When you work with an appraiser, you know they are state licensed and have in-depth knowledge for evaluating properties, but what exactly are the qualifications of the person behind the free online market analysis? Most likely they have none and are just data “collectors” who will take no responsibility for a faulty market analysis that you might rely on.

Word to the wise? Do not get me wrong, some online websites are a good place to start when looking to sell your home and get a market value, but PLEASE do not rely on them as the “word of God”. You really need to either speak with a local real estate agent who can draw up a Comparative Market Analysis (CMA), or better yet, spend the money and hire an appraiser to give you an appraisal. Use their knowledge about the local market to give you a leg up on the competition by properly pricing your home.

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