Daily Real Estate News |June 24, 2008

Home-Value Web Sites Miss the Mark

Online home-value sites offer some useful tools, but their estimates are often wrong.

"The percentage of error on these estimates is still very large," says Delores Conway, director of the Casden Forecast at the University of Southern California Lusk Center for Real Estate. If there are not many comparable sales in one area, for example, she says, "The estimates will have huge errors in them."

Zillow.com and Cyberhomes.com rely on computer-generated automated models to estimate values. The models help compensate for the fact that many neighborhoods don't have enough sales to generate accurate values based on experience.

But these computer models don't reflect home condition, improvements and may not even accurately convey property descriptions.

Marty Frame, general manager of Cyberhomes.com, says the data on the site is best used as a way to form an overall impression of a neighborhood.

"Our goal is to provide you all this information and let you cherry-pick the things that are most interesting to you," Frame says. "You're going to look at an estimate and say, "that makes sense' or 'that doesn't make any sense."'

We see this all the time. We show up to list a home and the homeowner has a printout from Zillow and cannot understand why our recommendation is so much different from what the internet says.This is proof that the old addage applies: If it sounds too good to be true it probably is! I remember laughing at an old episode of The Simpsons where Marge and Homer both agreed that if it was in a book it must be true because who would write something that wasn't the truth down on paper. The same goes for the internet. The process that is used on these sites to reach the numbers that they publish are skewed. The best way to find out what your property is worth is calling your local professional. I don't cut my hair by myself, nor do I fix my own pool or car. Going to the internet for instructions to do these things yourself is ok if you weren't dealing with what is for most people the most expensive investment they have ever made.


Source: The Associated Press (06/23/2008)

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