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Internet Home Appraisal
Have you ever searched online to get an internet home appraisal?
Internet Home Appraisal
There are some very large real estate web sites that provide computer estimates of the value of a property. Sorry but, I won’t name names. However, please let me explain how a computer estimate is done.
The largest and best known company that provides this free service collects the address that you input. They then locate the property and find other recently sold homes in the area. They use a computer algorithm to determine how large a radius to use for a specific area. This algorithm is based upon the density of properties in the area.
They then add up the value all of the homes that sold within that radius over the past six months. For example, if there are 12 homes sold, the computer totals the sold price of the 12 homes, which is public records. Then they divide that total amount of the sales by 12. Then they supply the average price of the homes as their estimate. Doesn’t that sound simple?
Simple yes, but not necessarily accurate.
To test their algorithm, I looked up the value of a house. The subject house I submitted was a 3000 square feet, five-bedroom Colonial with a pool, basement and 2 car garage on a half acre property. The actual value of that home was in excess of $500,000. However, within the radius the algorithm selected from that house is a condo complex. The selling prices of these condos was between $250,000 to $280,000. When applying the formula of the single family homes and the condos that sold, it showed that the property I submitted was worth $370,000. Next, I checked the value of one of the condos the algorithm added. The condos had a different radius, which included even higher priced single family homes. The “estimate” said the condos, which again are actually valued around $260,000, were worth around $425,000.
A computer cannot do an accurate property valuation. The human touch is required in order to select the comparable properties. Even if properties are physically close, a person who’s familiar with the properties has to decide which ones to add into the equations. And quite often, the person best qualified to make those decisions is a local Realtor. SO if you want an accurate property valuation, call me. We’ll provide you with an accurate, complimentary Market Analysis.