Online Accuracy: Property Values

This week we answer a listener question.

Q: "I am addicted to looking at property values on Zillow.com. I watch my home’s value fluctuate. Exactly, how accurate are the estimates from these sites?"

A: There are many websites that estimate property value and each one needs to be taken with a grain of salt. Zestimates from Zillow.com appear to be random and are not consistent. These online estimates range from 5% of the sales price to over 20%. 

Websites that assess the value of your home, rely upon data from your town’s tax assessor’s database and also upon recent sales data. There are a few problems with this means of evaluating a property’s worth. 

First, it is not possible for an entity located off the Cape to accurately assess the condition of a property. A physical inspection is valuable.

Second, location attributes are crucial line items in any physical appraisal. An external obsolescence may not be noted that can significantly impact value. 
Third, when you look up a property, the list of comparable recent sales that are used to determine value, almost always includes homes or condominiums that have nothing in common with the subject. 

A perfect example of this flaw is when you research a waterfront property in Provincetown, Truro, Wellfleet or Eastham. You will see comparable sales listed that may only be a half mile from the subject but are not on the water. The value is tremendously different, however, this is not figured into the equation.
The best way to determine the value of your property is to hire a Certified Appraiser. An appraisal will provide the definitive value of your home. Or, ask your Real Estate Broker to prepare an opinion of value backed up by a Comparative Market Analysis. 

Take those online websites and do yourself a favor…hit escape.