How much is my house really worth?
You have seen this real estate software algorithm all over the internet on real estate websites. How much validation can you put into these “comparable” based property valuation tools? Well you have probably done a quick analysis of your property valuation on Zillow for an estimate, like what you see? Is it a fair market price for your area based on the current home sales in the vicinity?
We have seen some wildly based home price valuation statistics from these apps. I just typed in a property valuation search for luxury homes in Beverly Hills. I pulled up an address with a home estimated at 11M, the recent sales comps range between 8M and 15M so obviously the software algorithm is basically dividing the recent sale prices right down the middle? I know there is more to it than that, the application also looks at the median sale growth/decline in the area and what the home may have sold for in the past.
However, after all the market fluctuations we have seen in the last decade (probably the most disruptive time in recent real estate history) the home pricing models of past sales are often meaningless.
What about the rehab costs? What about a 101 other issues with a specific property, curb appeal, upkeep, maintenance, natural hazard disclosure issues, possible CLUE report issues, tax liens, assessments, etc.etc. All of these issues are brought up (hopefully disclosed) in the real estate sale transaction and can be used to leverage the “real price of a home”. These algorithms and search engines for home buyer information are fun, but what if you could find a better system for evaluating the real cost of what is my house worth?