Appraisal House Blog

home value websites
April 4th, 2008 8:47 AM
I often get told by homeowners, "I looked at Zillow (or, or similar) and it said my house is worth (x)". 
While I will admit that the values have improved over the past few years (I've been monitoring my own house since Zillow came online), they are still typically only good to maybe 10 or 15% of the true value that an in-person appraisal would provide (IMO).  So when you are trying to sell your $500,000 house and Zillow says it's worth $425,000 to $450,000, are you willing to take that $50,000+ loss because you didn't want to shell out $400 for a professional appraisal?  Conversely, do you want to overprice your house and watch it sit on the market for several months, drop the price multiple times, and finally take an amount (the true value) that you feel unhappy with?  Of course not.  That's why, regardless of how good an algorithm these companies come up with, nothing will ever really compare with an honest, impartial assessment by a professional who has actually come to your home and actually seen and considered the positives and negatives of your house.   
What these companies do is crunch numbers to come up with a value, but they cannot really account for quality, condition, appeal, landscaping, views, and topography.  So you end up with a value that is only fairly accurate if everything around you for a mile or two was built by the same builder with the same finishout, and you are in a very flat area where everyone has the same view.  Think of it this way, as a small example.  Two houses built by the same builder at the same time in the same neighborhood directly across the street from one another, and with the exact same floorplan.  All things are equal, except that one is on the hillside and has excellent views of the lake.  The other house has no views, as the other house is blocking it.  Are they equal?  To Zillow they are, but an appraiser would see and consider that view when determining a value.
I've walked into houses that are in very homogenous subdivisions, where all the homes were built by one or two builders and were the same price range, with very similar finishouts, but the house was completely trashed (renters, big dogs, foreclosures, and just very poor housekeepers).  If the house across the street was well-kept, are they worth the same thing?  No, but would tell you they were.
I can promise you that although $400 sounds like a lot of money, on an hourly basis appraisers work pretty cheap.  And when you are making decisions involving your home where an incorrect value could cost you tens of thousands of dollars, it's worth it to spend the money to get it done right.

Posted in:General
Posted by Mike Lay (Austin Area) on April 4th, 2008 8:47 AMPost a Comment

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