Living in the information age means you are just a mouse click away from knowing anything from movie times to the weather in New Zealand.
Yes, we can research most topics in under one minute and which then qualifies us as an “expert”. But when it comes to South Bay home values, online resources may not be the best source of information.
Websites such as Zillow and others try to provide seemingly accurate real estate values in markets all over the country.
The basis for the site’s estimates appears grounded in real estate norms such as square footage, number of bedrooms, bathrooms and other tangibles. While that should make sense in determining a home’s value, reality and Zillow can be miles apart.
Zestimates Lack Real Estate Reality
Consider, for a moment, that formulas such as Zillow’s Zestimate suffer a built-in error rate of about 8 percent. That figure may seem acceptable in a political poll, except when you consider the results of the 2016 elections. Yes, 8 points can be huge.
If you do the math on Zillow’s average error rate, a $300,000 home would be priced incorrectly by as much as $24,000. That makes a substantial difference to everyday people trying to fit a home into their budget and pre-approval limit. A better understanding of online estimates may provide a clearer picture of why it’s important to work with an El Segundo real estate professional.
Online Values are Done with a Formula
Zillow is a tremendous resource for homeowners and provides so much value and information once difficult to obtain. Zillow’s home value estimates are, however, simplistic in nature. A real estate professional reviews the home size, rooms, location and similar properties selling in the area. Zillow will utilize many of the same standards.
But a real estate agent will also take a walk-thru of your home and gain a working knowledge about what makes it unique. Those become selling points that are marketed to prospective buyers who value the particulars of your home.
Online resources have no tab for Smart technology, picturesque views or curb appeal. A fancy algorithm cannot replace the human factor. People buy, sell and live in homes, not computers.
Zestimates Commonly Mistaken for Accurate Pricing
Perhaps the biggest faux pas made by Zillow and other online resources is that they rely on other digital information. In many cases, that means local tax assessor records, other published asking prices and building cost estimates. This type of information tends to miss the mark in many ways.
As an example, outdoor decks and patios can add tangible square footage to a home. But recent remodeling projects may not be reflected on a city or town tax valuation for several years, if at all.
Updated kitchens and bathrooms are generally not part of an assessment because officials rarely take the time to complete a thorough inspection of a home’s interior. Yet these things can dramatically uptick a property’s market value. Zillow itself acknowledges that its Zestimates should be taken with a grain of salt. You should consider them as a very rough estimate as well – especially in the South Bay.
This article originally appeared on eGundo.com – Actual Home Values vs. Zillow Zestimates