How Zillow Determines Your Home’s Value

The days of hiring an expensive appraiser or calling your local Realtor in order to find out what your home is worth might slowly coming to an end. Real estate agents and appraisers basically research the value of properties that have sold in the past and others that are currently on the market in order to come up with a suitable value for your home. Today, you can carry out the same research on yourself by relying on real estate comps to find out the value of any real estate property you would like.

Online Resources for Determining the Value of Your Property

The method of using comparable market analysis to determine the house value has started to see competition from a number of online websites that are making the estimation process quite easier. The tools we use in determining property value are getting better and better with each passing day, as technology improves. Finding comparable data is now as simple as filling your address into a form. Among the two most sought after websites offering these amazing services are http://www.zillow.com and http://www.trulia.com. So, how do these two really work?

Zillow

Zillow is the most popular player in the game of online house values. Through its “Zestimate,” feature – an automated estimate based on sales comps and public records – the website receives about 8 to 10.5 million visitors every month.

Zillow takes a direct approach in determining home value. Amy Bohutinsky, Zillow’s vice president of communications, says the website has houses data on approximately 100 million homes, representing 85 percent of all houses in the US. While information on square footage, home sales and tax data is public in most counties including the US, it is often time-consuming and hard for the general public to access it.

In most cases much of this info is public, but quite hard to find. Sometimes, you are literally forced to go down to a court house and look for it out in a book. Zillow updates its data up to four times per week and makes use of sophisticated algorithms in order to determine values based on available information and data, including comparable sales and public records. Square footage, lot size, the number of baths, number of bedrooms, prior sales, tax assessments information and more are also considered during the final valuation. Homeowners, who simply want to find an accurate “Zestimate” on their homes or in the process of selling them, can also sign in and add information about changes in their home such as remodels. Integrating images and maps from Google, Zillow.com is a site where visitors can literally scan maps and get to know the estimated values on just about any real estate property.

“Literally, there are hundreds of inputs on Zillow, and the Zestimate of a given property could end up changing up to to three times per week based on what’s happening with home sales in the given area.” http://www.zillow.com

Trulia

Receiving between 5.6 million and 6.5 million visitors every month, Trulia.com is among the most visited real estate websites in the world. It has 3.3 million to 3.6 million homes listed for sale on average and has also recorded past history, and sales data information on 70 million to 85 million homes. As a matter of fact, Trulia ranks second after Zillow both in terms of visitors received as well as home-sales data stored. The website features prices trends, sales prices and property profiles on public record, and allows visitors to compare their properties with other recently sold comparable real estate properties. Trulia provides average list prices for similar homes, public information and value ranges for each home. Visitors can use the information available to determine their own fair values for properties; much like appraisers use comparables to come up with property estimates.

However, visitors are advised to avoid using comparables from the last five months as they are not really good enough to be relied on. It is important to have in mind that US property markets tend to change as often as every two to three months. “Trulia is going to offer you an idea of what’s in the market and you can even compare up to six properties side by side.” http://www.trulia.com/trulia_estimates

Trulia also has market trend reports which show average listing prices, median sales prices number of sales, ZIP codes and market trends for given neighborhoods. An opinion and advice section connects users on the website with real estate professionals via blogs and question and answer sessions. For individuals looking to find out the estimate value of a home they want to refinance, sell, or buy, Trulia virtually offers all of the information that they require.

Home Valuation Alternatives

Like many other business, these two real estate websites are facing stiff competition from other home value estimation websites. Among them include Redfin.com that has been in existence since 2004. It is based in Seattle and it first launched its home selling and home buying services in 2006. It has won numerous corporate awards and is fast rising to bring about stiff competition in this field of real estate. Other notable websites include RealEstateABC, Eppraisal, SmartZip, and Realtor.com among a host of many more.

Should you rely on these online “appraisers”?

Well, one can get a ballpark figure nowadays on the value of just about any real estate property in the country by just the click of your mouse. However, you shouldn’t wholly bet the farm on the estimate values given by these websites when you want to sell your house. They may be right on the money, but also out in left field. And despite the fact that a number of them offer immediate home value estimates, it is important to understand that what they give is just a computerized approximation and not what a professional appraiser calculates.

Moreover, different sites sometimes have very different valuations. For instance, Zillow may say your house is worth $170,000 while Trulia may say it’s worth $190,000. Valuations that are 30% or even 55% lower or higher than the eventual sale price of a property are not uncommon, as the websites themselves acknowledge. The estimate changes, sometimes by thousands of dollars, can be as a result of new data being plugged into the algorithms of these websites.

However, despite this rare downside, real estate agents and homeowners report that many people put enough much faith in these estimates and that they have a very huge impact on their home buying and selling habits.