What is the property worth? It is something a lot of homeowners wonder about every time, especially if they are thinking of refinancing or selling their properties. For an answer, a lot of people are turning to automated online estimators to get reliable figures.
How reliable are online estimators?
If people have tried using one of these platforms – either on a traditional bank site or one of the other versions floating around the Internet – they may have noticed that the numbers they get for their properties can differ widely. In some instances, the automated valuation provided can be different from the property’s true value by more than 50% – making the number useless. The biggest question is: Are these professionals any good at all? Or are there ways of telling how accurate, they are likely to be?
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How do these professionals work?
First, the way these platforms work so that they gather data from public records and calculate it all together to try to produce an excellent estimate of a property’s value. It includes things like square footage, the number of baths, the number of bedrooms, and age, as well as additional features like a finished basement, patio, and the likes.
People also need to take into consideration the prices from recent property sales in the area, adjust for the features and sizes of each, as well as try to spit out a figure that will reflect the value of the house. The disadvantage is that these things will work well with particular kinds of properties but not others. These platforms tend to work pretty well for houses in more prominent neighborhoods of similar types that were all designed and built around the same time, as well as where there is a steady rate of property sales over time.
Automated evaluators become pretty unreliable the more distinctive a house is and when there have been a couple of similar houses sold in the area over the past couple of years. These are usually properties in rural areas, small areas, or neighborhoods featuring a mixture of properties of varying styles, ages, quality, and sizes.
These platforms are also less reliable when it comes to assessing custom-built houses or properties with distinctive features. Online evaluators also have no way to check the condition of a house or how well it has been preserved or maintained.
These things also may fail to take into consideration all improvements that have been done to the property, like adding more rooms, especially if the details do not show up on the tax rolls. A lot of these professionals will list the basic info they are basing their evaluation on, like the square footage of the property and the like. That is why people can check the listing for the property to see if it is in the right direction – if not, individuals need to take it into consideration when adjusting the number the evaluator provides.
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How recent are these pieces of information?
Another sign that the evaluation provided may be very unreliable is if the professional seems to be relying on previous or old sales info. A lot of these experts will show individuals a map of their neighborhood with recently sold houses marked, along with sales values.
But if people find that most of these sales are pretty old, and there are a couple of recent sales reports, the info may be out of date. But, if the general neighborhood shows a dozen or more sales in the past year, the number is more likely to be very reliable.
Another thing people need to do is to check the recently sold properties to see what their house is being compared with. Suppose the neighborhood has mixed characters, which of the sold properties are most similar in age and style to their own. These things are more likely to be the most reliable models of what their house is worth.
People can’t rely on averages
Individuals might think they can simply check their property’s value using a couple of estimators and see if some cluster around a certain value. While that is a logical way to go forward, it is not always reliable. For one thing, various estimators may make the same assumptions or use the same info sets to produce their valuations – so if the premises are pretty wrong or the info is bad, they could be very wrong the same way.
The best and most accurate way to get a valuation of the property value is to have a professional evaluation done. But a lot of property owners are unwilling to pay for these things unless they have decided to go ahead and refinance or sell. Short of that, knowing and understanding how these things work, as well as taking into consideration their idiosyncrasies or peculiarities, can provide individuals an excellent fair value.