real estate

The Downside of Online Home-Price Estimators

Don't bet the ranch on an online home-price estimator.

If you're thinking of selling or refinancing your home, or you're simply curious to see its latest market value, you can get an estimate in seconds. Just plug your address into an online home-value estimator, such as Zillow.com, Trulia.com, Eppraisal.com or the CoreLogic tool often found on bank Web sites.

All estimators collect data from public records, pull the facts for your home and recent comparable sales, and run the data through a computer model to produce an estimated value. But the results are only as good as the data input. I put four estimators to the test for my home and received wide-ranging results -- a difference of more than $200,000 between the highest and lowest estimate.

Each of the estimators started with out-of-date information because the public record of my home failed to reflect an additional bedroom and many square feet of living space that resulted from a major renovation we did with proper permits. (All the estimators except Eppraisal let you edit your home’s data and update the valuation.) Also, the estimators can’t assess the impact of good or poor condition, extra quality in design and construction, reno­vations that didn’t require permits, a purple exterior, or a dump next door, says Richard Borges, president of the Appraisal Institute.

Zillow and Trulia describe their estimates as a "starting point." Zillow also recommends that you supplement a Zestimate with a visit to a property, an appraisal, or a comparative market analysis from a real estate agent.

 

I followed that advice with the help of Chris Pritchard, an agent with McEnearney Associates, a McLean, Va., real estate agency. She observed that my home has many unique features that make a comparable analysis challenging. For example, we can’t add a paved driveway or a patio, deck or garage because of a local ground-coverage limit. She estimated my house’s market value close to Trulia's estimate. Zillows estimate was about $80,000 higher, Eppraisal’s was $52,000 lower, and CoreLogic's was $121,000 less.

Zillow.com and Trulia.com are most useful if you're buying or selling a home. You can see list prices of homes on the market or check recent sale prices (although they may be neither current nor comprehensive). The sites also list price history and property taxes, so you can see market values for your neighbors' homes and check out how much they paid for them and what they pay in property taxes.

Most Popular

Planning to Sell Your Home in Retirement? Downsize Costs Along With Space
Budgeting

Planning to Sell Your Home in Retirement? Downsize Costs Along With Space

In this hot real estate market, consider the costs of buying and selling a house along with the expenses associated with your new digs.
November 13, 2020
What Biden Will Do: 24 Policy Plays to Expect From the Next Administration
Politics

What Biden Will Do: 24 Policy Plays to Expect From the Next Administration

The Kiplinger Letter forecasts President-Elect Joe Biden’s biggest priorities -- and the likelihood of progress on them.
November 19, 2020
The 13 Best Healthcare Stocks to Buy for 2021
Kiplinger's Investing Outlook

The 13 Best Healthcare Stocks to Buy for 2021

Most of the best healthcare stocks for 2021 will have some sort of ties to COVID, whether it's producing a vaccine or cure, or benefiting from the vir…
November 20, 2020

Recommended

Analyst: Housing Market Will Stay Strong in 2021
Markets

Analyst: Housing Market Will Stay Strong in 2021

But the pace of home sales could slow by the end of the year.
November 27, 2020
Planning to Sell Your Home in Retirement? Downsize Costs Along With Space
Budgeting

Planning to Sell Your Home in Retirement? Downsize Costs Along With Space

In this hot real estate market, consider the costs of buying and selling a house along with the expenses associated with your new digs.
November 13, 2020
9 Places That Will Pay You to Live There
real estate

9 Places That Will Pay You to Live There

Working remotely? You may want to check out these places who'll pay you to move there.
October 30, 2020
11 Home Features Today's Buyers Want Most
home

11 Home Features Today's Buyers Want Most

Thinking about selling your house? Here are several home features potential buyers are coveting right now.
October 16, 2020