Are Home Value Estimators Guesstimating Your Money Away?
Updated: Aug 23, 2019
To be more precise, is a $60,000 error important when assessing your investments?
We’ve discussed this topic previously in an article about Chase Home Value Estimator Accuracy.
Because Real Estate Comps Today uses actual local Realtors instead of algorithms, they continue to provide accurate comparison reports that best out Zillow and others as the most accurate home value estimator.
Type Home Value Estimator in Google’s search box and you’ll find that 42,000,000 results are returned. On face value it's awesome that so many options have become available to homeowners who may be thinking of a second mortgage, selling their home or tapping into their equity.
But it should be alarming, considering how many varied online options exist concerning such a huge investment of a person or family's hopes and dreams. They can’t all be right. If they all have different values then likely none of them are correct. 42 million estimates can’t be right and that's where the virtual world comes up short.
Compared to using a seasoned and knowledgeable real estate agent's comps, or comparison report, virtual home value estimators come up short and cost homeowners thousands of dollars. Millions each year are lost by uninformed home owners who rely on a guesstimator.
Home Value Estimator Tool Challenge
Take the Home Value Estimator Tool Challenge and look up the same address on the following estimator sites:
When I look up one property I get the following values:
Bank of America: $203,237 - $260,982
You can compare this real world test by using your own address.
Home Value Estimator Inaccuracy
With values from the test above, ranging from $203,000 to $260,000, how could a homeowner or a buyer bridge a nearly $60,000 gap? That gap represents 30% of the cost of a $200,000 home. The margin of error is vast and the implications of the data are huge. The dictionary defines “substantial” as only 20%.
These sources also realize they are not reliable. On Bank of America’s Home Value Estimator, it says, “This is our estimate of your home's value. It is intended to be used for illustrative purposes only and does not represent an appraisal or confirmation of actual home value.” AKA, we wouldn’t use this number.
Chase gives great advice “Results shown are estimates only. Speak with a Chase Home Lending Advisor for more specific information.” While you don't have to speak with a Chase employee, they are acknowledging that you need to consult with an expert first, all but admitting that the value they display is of no value in itself.
They offer these guesses for free with no intention of honoring the value they serve users. The home value estimator for them is just a gimmick to get you in contact with their bank.
Zillow and Trulia are the same company, yet they differ by about $11,000 in their estimates. How or why do the same company's estimates differ by over ten thousand dollars? They do because their algorithms are not consistant. They cannot accurately and consistently assess a home’s value without the help of a local real estate agent.
That is why Real Estate Comps Today is your best answer. Rather than giving you a figure that ranges between $60,000 more or less, they provide you, from the start, with an accurate representation or an estimate rather than a guestimate. They understand that the value of your investment is important and $60,000 is way more than a range … it's a shot in the dark.
So be careful when chasing your home value and remember that Chase doesn’t use their own estimator.
What Makes Real Estate Comps Today Better?
From their site’s “About” page “Our Network of Agent Volunteers covers every market area in the U.S., even rural areas.
Every agent in our network has voluntarily opted into our program, ready and eager to pull your comps and help you find your accurate house value.
Once your order is completed, it will be immediately sent to an agent who specializes in the local market of your property.
Our local agents have personal insights about the neighborhood and the condition of the properties that the databases and algorithms of instant home value sites could never know.
The agent will personally pull your comps and email them to you. The agent may also contact you to confirm information or special instructions about the property and its particular features in order to make sure you get the best possible comps.”
You’ll Get What You Paid For...Free Home Value Estimators
Real estate comparison reports that cost nothing come with the same value. Chase nor Bank of America stands behind the value they offer consumers with these “tools”. If it isn’t good enough for them you have to consider if it is good enough for you.