Dangers of Online Estimates

The Dangers of Online Estimates.  Long before the “For Sale” sign goes up on the front lawn, and the ad goes in the newspaper or online, one of the first things many homeowners do when they first consider selling their house is try to figure out a price by getting an online estimate of their home value. And their first stop is usually the computer.

It’s an understandable impulse. You can research without anyone knowing, in case you change your mind later. Once you contact a real estate agent, there’s a sense of no going back, even if you’re still not committed to the move. And it’s so easy – there are plenty of websites that will give you an appraisal (estimate) – and probably try to sell you something later on. Just enter the information requested, and it spits out a price.

But how can you know if the price given is reliable? You can’t, anymore than you can believe the latest celebrity break-up rumor on a Hollywood gossip site. A free estimate in seconds after a few keyboard clicks may be quick and free and satisfying in the moment, but ultimately it might be inaccurate, and defeat your purpose if it’s not the number you expected.

Sites that provide online home values do so through comparables – they run your address through a database and look for other homes in your area that have sold recently, and use those numbers to calculate a sales price.

Everyone has access to these comparables, including realtors. But a Realtor doesn’t stop there. They’ll take the comparable rate as a starting point, and then use their knowledge of the neighborhood to evaluate other factors – current economic conditions, school districts, townhome values vs. condos – any one of these can have a dramatic impact on the value of a property. A computer can’t do that kind of work for you.

So if you are thinking about selling, even if you’re not at the ‘serious’ stage yet, speak to a realtor who works in your area. That is the best way to obtain an accurate, informed estimate of what your home is worth.