Only a Million Dollars Off!– Home Valuation Sites Compared

Tuesday, March 04, 2008

Like any homeowner, I care what my house is worth.  Even if I don’t plan to sell, I always want to believe that somebody would pay lots of money for it if I did.  A bigger number gives me piece of mind and frankly, makes me feel cool.  Yet, with all the bad real estate news of late, even as a Realtor, I have been less sure about what it’s worth. 

So I decided to check out my Larkspur, California home on those online home valuation websites.

The valuation sites I used were RealEstateABC, Zillow, Cyberhomes, and Eppraisal.  Here is what they said my house was worth:

RealEstateABC - $1,950,000
Zillow - $2,081,000
Cyberhomes - $1,041,411
Eppraisal - $1,726,963

Now I am more confused than ever!  Cyberhomes and Zillow and two of the most highly used online home value estimators. So how can they be $1,039,589 apart on the same exact same house on the exact same day?  That’s a 100% disagreement between the two.  Even a difference 10-20% really makes planning your life or feeling cool pretty difficult.

Apparently, I am not the only person to run into this problem.  Zillow got in trouble with the Arizona Board of Appraisal for their approach.  In all fairness, all these site state in one way or another that they should only be used as a starting point in valuing a home.  Besides, their real goal is not accuracy but rather to get visitors to their sites in order to sell advertising.

So what if you are actually planning on selling or buying a home? Can these sites help?  The answer depends on where you live.  The more similar the homes in your area, the closer these sites should be to reality.  What they all miss are things like: views, property condition, lot usability, neighbors, sex appeal, etc.  Nothing is more important in selling a home than setting the right asking price.  The local market knowledge that an experienced and smart real estate agent provides is critical in helping decide how much to ask or how much to pay for a house.  For the more self-service type, use a tool like CleanOffer to track current listings and get true sold prices.

So how would I rank order the above valuation sites for accuracy this week?

1. Zillow
2. RealEstateABC
3. Eppraisal
4. Cyberhomes

Like all homeowners I like whoever thinks my home is worth the most!