I got a call from a client earlier this week because one of her co-workers pointed out to her that her home is worth about 80K less than what she paid for it two years ago. The co-worker found the information on one of those web sites that has property valuations on it. The co-worker was interested in buying the home.
The seller is very concerned that potential buyers like her co-worker will see the low valuation and decide not to buy the home, because it will be listed for a higher amount. Buyers who look up the value of that property, on a web site that has home values, may believe what they see, because it is what they want to see, and because it is on the internet. Home owners like my client are justified in being worried about the low value.
I don’t have an answer for this one but think that there should be some kind of a rule or law against giving bad property valuations to the general public. There isn’t such a law. The web sites have disclaimers on them and they operate under the same rules as this blog does, freedom of speech. Unfortunately some consumers believe what they read on the home valuation sites. Most some of the sites are actually "lead capture" systems, and seller information is sold to Realtors and the promise of an on-line home valuation is just bait. The Realtors are supposed to be local experts. I found a couple of St. Paul experts on one site who have never sold a home in St. Paul. The Realtor who buys the "lead" provides the valuation. Other sites are set up to sell advertising, and again the valuations are used to attract visitors to the site.
I have invited the people who work for the companies that make some of these sites to come on my blog and explain where the data comes from and why they publish numbers, and to provide some information about how accurate they are. So far no one has taken me up on it, and most of them know who I am and they know my blog. I field calls from clients and consumers all the time about homes values they find on the internet. I can’t explain someone else’s numbers, all I can do is pull some comparable homes and give my own price opinion. I can show my math and explain my numbers.
Fine print, the palm tree picture was not taken in Minnesota, they don’t grow here, at least not outside.
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This one of the greatest frustrations I have in my immediate area. My city, White Plains – is very desirable right now. Unfortunately, there is White Plains, and White Plains P.O. (with a White Plains zip code) – which is NOT White Plains. Different town, different schools, different taxes. Yet some sites use sales from these areas as “comps” for property in White Plains, driving down the estimate. Trying to convince a buyer after “seeing the estimate on the internet” that the higher price point is indeed valid can be very difficult.
This one of the greatest frustrations I have in my immediate area. My city, White Plains – is very desirable right now. Unfortunately, there is White Plains, and White Plains P.O. (with a White Plains zip code) – which is NOT White Plains. Different town, different schools, different taxes. Yet some sites use sales from these areas as “comps” for property in White Plains, driving down the estimate. Trying to convince a buyer after “seeing the estimate on the internet” that the higher price point is indeed valid can be very difficult.
I agree with this blog post there must be a law that makes those that post property values responsible to the possible harm they cause. Or at the very minimium they should have to be backed up with comparables and adjustments that match the state’s standard appraisal guidelines.
What you see on website out there is wildly in accurate. Inclusing tax appraisal values. Many areas appraisals are behind 5 years or more.