Since the launch of online home pricing websites such as Zillow and Trulia, homebuyers and sellers have been flocking to them in droves.Four of the biggest sites that offer home-value estimates get 100 million visits per month, reports Alyssa Abkowitz in the Wall Street Journal.
Users surf them to research the market, find out what amount to ask for or bid on a home, and also whether it’s time to refinance.
Yet experts say sites like Trulia get the valuations wrong by 20 per cent, and sometimes even 50 per cent above or below the actual price.
The estimates also tend to change frequently, sometimes by hundreds of thousands of dollars as the sites add new information to their real estate databases.
Most of the data come from tax assessor records and listing data from recent sales. However obtaining consistent information can be difficult for consumers, especially because counties use different measurements and models. Some determine home size by the number of bedrooms–those are mostly much older homes–while others focus on total square footage.
These real estate sites do have disclaimers saying they only offer estimates. And oftentimes, many of the values might not be so outrageously off. Zillow’s “Zestimates” page, for example, shows the site’s overall error rate to be about 8.5 per cent. About a quarter of the estimates are 20 per cent off or so by the time the sale closes.
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