Whether you want to put up your house for sale in Irvine, want to access your equity, or are just curious, online home value tools may seem like a perfect solution. All you need to do is enter your address to see an estimate of your home value. However, while the idea might be great, the truth is these tools can sometimes do more harm than good. Here’s why you shouldn’t rely on the estimate an online tool gives you.
An Online Model Can’t See
There are many factors an automated home valuation model simply can’t see that may affect your home value. For example, the model may be using recent sales in the neighborhood. It can’t take into account that your kitchen is beautifully remodeled while the kitchens in the sold homes were dated. This goes both ways: a computer model doesn’t know if your carpet needs to be replaced or you have an old roof.
The Margin of Error Can Be High
Most popular home value tools give an estimate range for your home, such as $255,000 to $268,000. This range can be quite high to boost the tool’s accuracy rate. Still, the margin of error can be very high as well. Some tools publish their error rate based on city or neighborhood. For instance, Zestimate, the popular home value tool from Zillow, has an average error of $14,000. In some areas, the error rate is even higher. When it comes to selling your home, refinancing, or taking out a loan, $14,000 could make or break the deal.
The Model May Have Incorrect Data
These valuation models use data such as property tax assessments and recent sales to create a value estimate. Each company can reach a different estimate because each uses its own types of data. If the website has incorrect data about your home or recent sales, the entire estimate will be skewed. Even square footage can be off if the information is not up to date or the tool uses property tax assessments. In some areas, agents and tax officials use half the square footage of a garage to determine taxable value. This number appears on the MLS, but it isn’t the whole picture.
There Is No Simple Answer
Online home valuation models are designed to crunch numbers and give you a simple answer about your home’s value. However, there is no quick and easy answer to your home’s value because it is based on what someone is willing to pay. Many factors go into determining a fair price, including market conditions, comparable home sales, and the condition of a home, which is why it’s important to work with a trusted real estate agent in Irvine to determine how much your home is worth rather than relying on a computer model that does nothing more than give you a starting point.
When looking to sell or purchase real estate, Irvine residents should make sure to connect with local agents who can help them complete the transaction. Call OC Residential today at 714-454-6304 to speak with one of our friendly agents.