In today’s world, the internet is usually the first resource people access when seeking information. This can be especially true when people are interested in buying or selling a home. Many real estate websites and apps are able to generate automated home value estimates, but should you really trust these figures?
We believe the answer is “Not entirely!” Depending on your property and local market activity, relying solely on an automated home value estimate may be a costly decision. According to Zillow.com, their automated home value estimates—dubbed “Zestimates”—have a nationwide median error of 5.6%. Would you be willing to leave 5.6% behind when selling your home? Furthermore, overpricing your home may motivate potential buyers to look elsewhere.
To help illustrate our point, we created a list of three reasons your automated home value may not reflect your home’s true market value.
1. Your Home is Unique
Is your home unlike others nearby? Automated home value estimates are generated based on past sales data in a given area. Although this may be a good start, automated systems have a difficult time accounting for attributes that make your home unique. For example, your updated kitchen, renovated bathroom, or new addition could affect the market value of your home, but go unaccounted for in an automated home value estimate.
2. The Market is Changing
In a changing market, automated home value estimates may be less accurate than estimates given in a steady market. The reason for this goes back to the fact that automated home value estimates are based on past sales data. For example, the value of a home that sold before the market began to heat up may not be an accurate indicator of your home’s current value.
3. Inaccurate Records
Automated home value estimates are generated based on records of previously sold properties. However, software is unable to detect errors that may affect your home value estimate. If an error exists within the property tax database, for example, an automated home value estimate may be dramatically skewed.
How To Get the Best Home Value Estimate
The best way to obtain up-to-date information regarding the value of your home is to contact a local expert for an in-home consultation. This free appointment will help you gain valuable insight into your market. Are you ready to take the next step toward selling your home? Sign up today to connect with one of our licensed REALTORS® and get all of your real estate questions answered.