closing the sale of this home for $247,000.00 I received an email from that company that starts with the letter "Z" and sounds like "pillow" stating "This Home was just Sold for $988,000.00"! Now I may be a good Realtor... But I'm not that good! This just proves that the online company's data is highly inaccurate! (yes I have a copy of this email if you would like to see it) Example 2 - A home in Ohio was put into one such system, Redfin (https://www.redfin.com/what-is-my-home-worth). The home last sold for $180,000 in 1998; it was appraised for refinancing in 2015 at $275,000. In 2017, Redfin’s calculator valued this 1890 Victorian home (4 bedrooms, 1.5 baths, and 2,100 square feet) in a four-block area of “Grand Old Ladies” at $158,000. The apparent reason is that the six “comps” (comparable recent sales) included only 2 homes in this desirable neighborhood (over $300,000), while four others outside this small neighborhood, although close, sold for $150,000 to $199,000. Because the system doesn’t understand the makeup of the area and simply pulled prices from a broader geographic area, the arrived-upon price was far below what it should have been. These tools are worthwhile for obtaining “comps” of area sales; however, they are not highly accurate in arriving at a proper listing price.
EXAMPLES OF DIFFERING HOME EVALUATIONS
A buyer is interested in a home listed at $420,000. The online valuation determines the house is worth $440,000. Based on that estimate, the buyer offers the asking price. When the professional appraisal comes in at $400,000, and the existing tax records assess the home at $300,000, the buyer wonders why the values are so different and whether he overpaid. The seller listed the home at $420,000 based on the online calculation of $440,00 thinking, at that price, the home would sell quickly and perhaps for even more. Why would the appraised value not be whatever a buyer was willing to pay?
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