Should You Trust Online Home Price Estimates?
Why Pricing Discrepancies Between
Real Estate Websites?
These estimates engines leverage automated valuation models (aka AVMs) which
receive data feeds from a number of resources such as MLS, public records, home
sales data, tax assessment records, etc. Some sites even request that home
sellers provide property record updates for their AVMs which can cause errors
Each model will generate its own price for any given property. As a result, it
is not uncommon to see significant discrepancies in estimates for the same
property, since none of the models can properly quantify the distinctive
characteristics of a home or even a neighborhood.
For instance, if you have done extensive renovations around your property, or
if your home is surrounded by larger properties, your estimate could be much
lower or higher than your home’s actual value.
As a buyer, keep in mind that lenders do not rely on these automated estimates
as a basis for a loan and that will have you pay for an appraisal which will
take into account the unique features of the home and compare it with other
homes with similar characteristics such has square footage, location in a
street, layout, etc.
In the end, evaluating a home isn’t just a matter of statistics and public
records. Online estimates will be taken into account by Realtors but just as a
reference point on top of which they will add all the distinctive features of
your home to get to a fair market value. Whether you want to buy or sell a
property, hiring a Realtor will save you time, money and the hurdles of an
inaccurate property valuation.
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