Parlor Tricks & Online Home Valuation Models
If you have ever toyed with selling your home or even if you’ve thought of buying one you have probably run across a web site or two that estimates housing values. It’s a nifty gimmick. You put the property address in the search bar of the valuation site and presto, it tells you what the home is worth.
Home valuation sites are certainly not new. They’ve been around for a couple of years. Through volatile years of prices going up and the equally volatile years of home values falling, tainted by short sales and foreclosures. In all those years, the accuracy of the reports has always been an issue.
I’ll be the first to acknowledge that they’re only an estimate and a more or less a parlor trick. Mention the name of any of the sites in online print and someone with a throwing stars and nun chucks will come tumbling out of the bushes to defend their estimate and remind you “that it’s only an estimate; we disclose that in the fine print”.
Do consumers really know that it’s only an estimate? Not even an estimate in some instances, just a guess on whatever number they’re able to collect, allowed to collect from the county clerk or bothered to collect at all. There are monkey’s throwing darts at the stock pages of the newspaper with far greater accuracy in some instances.
The last time I tried to find the disclaimer or accuracy claim on one of the sites I was unable to find it due to the small print and had to use “Control+F” on my computer to automatically find the text. I guess it is technically there so it counts whether you find or not or whether you and read it or not.
Periodically, I throw my own address in the search to see what my home is really worth and to keep up touch with their version of the real estate market. Yes, that was sarcasm if you were wondering. Today, my house was worth about $100,000 more than it would probably appraise for on a good day, without the HVCC - home valuation code of conduct miring it up. They’ve compared my home to sales of both single family homes on gulf access canals and condos in a bundled golf course community. Neither are remotely close comparables.
While I’m researching I usually check my parent’s home, too. This week I found out my parents home is so valuable that they should sell it, bank the cash and live off of the interest. It turns out that the data collected for their home valuation indicates the home next door is incorrectly valued at $1.4 million dollars in a neighborhood of modest homes ranging in price from $200-300,000.
Online home value guesstimate services are simply an entertainment gimmick to get people to the website to convert to leads and make money on ad clicks. So, what’s the big deal? Well, it may surprise you to learn that there have been loss mitigation departments discovered using these sites to approve or rather not approve sort sales.
I don’t know about you but it makes me wonder if those loss mitigation departments weren’t able to find the small print, too.
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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area. Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor. If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.
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