Research Triangle Real Estate

How much is my house worth seems like a question on the minds of a lot of
people these days. The easiest answer is that your property is worth what
someone is willing to pay you for it. But how do you figure out how much someone
will pay? One way is to put it up for sale and take offers. But what if you
don't really want to sell your property, you want to borrow money against its
value. Or say you do want to sell and want to determine what is a reasonable
asking price. The most common way to evaluate residential property values is
through a comparable sales analysis. By comparing your property to other similar
properties that have sold recently and making adjustments up or down based on
their differences, a current market value for your property can be estimated.
The ease or difficulty of this task can vary greatly depending on the property
and the availability of the needed information. If you are selling a condominium
in a large development with numerous recent sales of very similar units,
determining the market value is a relatively simple task. A unique property in
an area without many recent sales presents a far more complex challenge. You can
find any number of web sites that promise you free evaluations of your homes
value. These range from sites like Zillow,
which attempts to use available public record information on properties and
sales to generate a value, to a lead aggregation site like Housevalues.com,
which will ask you to register then sell your contact information to a real
estate agent in your area, who will provide you with an estimate of value as a
way to get their foot in the door to list your property. Many agent and firm
websites also offer a free market analysis, which allows them to bypass the lead
aggregator's fees and make more money if they end up getting your listing. Like
most things that are free, you generally get what you pay for. In the case of
Zillow, the problem lies in the accuracy of the information used and the
inability of the program to think rather than just obey instructions. As an
experiment, I asked Zillow to estimate the value of a townhome that I listed and
which sold in July. This is the MLS sheet for the property, which closed 7/10/06 at a price of $142,400. Here is Zillows current estimate of value, which is 13% higher than what the property
actually sold for 3 months earlier. Zillow lists the square footage as 396
instead of the actual 976 based on Orange County property data that does not
make sense even to me, much less to the computer program Zillow is using. Zillow
compares this property to other nearby properties using equally flawed property
information to arrive at its conclusion. Relying on Zillow's estimate in this
case would not be a good idea. In areas with more accurate property data
available, it seems likely that Zillow would provide more accurate values, but
its inability to actually think is a severely limiting factor in its accuracy.
Free market evaluations from real estate agents, whether coming from a lead
aggregator site or generated by their own website, will also vary widely in
their accuracy depending on such factors as the knowledge and experience of the
agent, the amount of time, effort and thought they expend, and their goal in
providing you with the value. The use of inaccurate data by an inexperienced
agent seeking to list your property will often lead to a flawed value estimate.
If you want to know what your property is really worth, it pays to understand
how the provider of that estimate comes up with the value. And remember, rarely
in life is anything of value given away truly for free.

# posted by John Goddin @ 10:20 AM