We’ve all stumbled across an email that claims to know exactly how much you can get for your home. Have you ever wondered how accurate the various listing company’s value assessments are? Of course, you have! And if you follow any real estate blogs or agents on social media, you’ve probably also seen them warn against trusting these websites when it comes to getting your information.

Here’s why – 

 

Around 2011, an algorithm was created to give homeowners an idea of their home’s estimated worth. Ever since then, this has been clickbait gold for the sites that claim to give you an accurate estimate of your home’s value instantly without considering various factors that only a real person with local data could access. Yes, the way I see it, this is basically just a way to drive more people to their websites, and it works. 

 

So, what’s the special sauce? What is in the algorithm that has all of us prematurely celebrating the value of our home? These “estimates” are based on the size and location of the home and the sales data that the sites collect from regional MLS. Accurate? Sure, maybe sometimes they get lucky. However, the main issue comes with the sites’ inability to consider different neighborhoods and even different pricing per street which is a big deal in Dallas. And obviously, as we have seen in the last couple of years, off-market sales are booming and there is no way for these sites to gain access to this information. Even sites that claim to be within 1.9% of the actual value, unfortunately, fall short. It’s just the facts. Go ahead and ask any real estate agent in our area that you trust. 

 

Here’s an example. Let’s take a neighborhood in Preston Hollow, for instance. I would say 30% of sales there in the last couple of years have been off-market. Additionally, the difference in the streets for land can have a 25% land value swing. Have a completely updated older home?  Even the most remodeled and move-in-ready property is just seen as an old home to the most sophisticated of algorithms. In addition, with the rising market trends and a pandemic, there is no way to predict a home’s value without a thorough evaluation from its owner and listing agent. It could literally change from month to month. 

 

Where do these various apps and their information hold true? If you are looking in an area with trac homes where all the properties listed were built about the same time and are all about the same size, you are more likely to have success. Be careful if a pool has been added, there’s a corner lot to consider, or if it backs up to a creek. These variables all affect a home’s listing price.

 

In the end, it’s your real estate agent who can give you the best valuation. I would love for that person to be me, and if it isn’t, make sure it is someone who works in the home market daily in the area in which you are looking to buy. Have any questions? Please know that I am always available and excited to talk real estate with you. 

 

Christy

Christy.Berry@Compass.com

Alison JensenJune 6, 2022