I came across this article, How to Figure the Fuzzy Math of Internet Home Values, by the Wall Street Journal and thought I'd share some thoughts. This is an important topic given today's real estate climate. So much of our information originates from the Internet, and it's easy to assume that online = accurate.
While it's fine to go to sites like Trulia, Realtor.com, and Zillow to get a general benchmark for what a home is worth, you don't want to place all of your eggs in a digital basket. Online valuations have been known to be as much as 50% higher or lower than a property's eventual sale price, and valuation criteria are often inconsistent across states and even towns. And when you compare apples to oranges, you're going to be left with sour grapes.
Real estate can be a fickle and sometimes counter intuitive business, so it is important for home buyers and sellers to back up their online real estate activities with input from multiple sources. If you want to find real estate religion, talk to a Realtor with local expertise in your area who can break down the reasoning behind the numbers, and gauge intangibles that may not be part of an automated valuation model.
They might even buy you a cup of coffee and a muffin - something else you won't get from an algorithm.
