Wednesday, November 13, 2013 - Article by: Carlo Sanchez - Security National Mortgage Company -
The Price of a HomePosted by Carlo Sanchez
There is this home that is valued at $285K on Zillow. Zillow makes no claim that the home prices they list are accurate. In fact they call them Zestimates and they saythat they use a proprietary formula and that the number is not an accurate home valuation. Proprietary means secret and they don't show their math and could be using a dart board.
The same home that is valued at $285K on Zillow is valued at $183K by the county tax assessor. They don't show their math either and, who knows, they might be using a dart board, too, to come up with values.
That very same home was listed in our MLS for $205K, and an appraiser came up with a value of $199K for it and it actually sold for 196K. At one point, a different appraiser using software only, and probably a dart board, came up with a value of $123K. Wow!!!
Pricing real estate is difficult. To date no one has invented software or a even a proprietary system that can replicate the kind of fuzzy logic that is needed for an accurate appraisal. The standard practice used by appraisers is to find three comparable properties in the immediate area that have been sold in the last year. Comparable properties are rarely exactly the same as the subject property and so the appraiser makes some adjustments.
It is important to know what the source is for data. Just because you saw it on the internet doesn't mean that it is accurate.
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