Many online real estate sites offer a home value estimate feature. Potential sellers are able to visit these sites and put in the address of their home to see a suggested list price. Local Realtors believe these may not be accurate, however.
Local Realtor Ben Williams with Century 21 Dean Gilbert attributed this to a lack of knowledge regarding local markets.
“They don’t know our market,” Williams said. “They don’t know the part of the town that’s more sought after and the part that’s less sought after.”
The websites most often offering a home value estimate are national sites run by large corporations. The values are generated based on recent home sales as well as national averages. The Grayson County housing market contains within it many rural homes and other variations on traditional housing that do not fall within an average. For this reason, Beverly Stein with Jenel McGrath Realtors believes the only way to obtain a true value is to speak to a local professional.
“You need to get with a Realtor to run current comps in your immediate area,” McGrath said. “Your local Realtor knows the properties in your area better. It’s because we are familiar with the neighborhoods and can provide written comparables.”
Realtors are happy to provide a comparative market analysis to a potential seller for free. This short report will show other comparable properties in the area and what they sell for. The report does include a suggested listing price but ultimately the decision on what price to list it at is up to the seller, Stein said.
“Sometimes the report surprises homeowners,” Stein said. “Sometimes they are really in love with their home and think it’s worth more than it is. Right now it’s really hard with our market because a lot of people are wanting to start out a little higher. They might get the higher price but then it becomes an issue of whether or not it will appraise for that price.”
A formal appraisal is conducted by a licensed appraiser to determine the actual value of the home. A lender will not lend more money than the appraisal says it is worth regardless of what sales price was original agreed upon. Williams explained he and other Realtors have had issues with getting homes to appraise for the right price when an appraiser is not local.
“They’re missing the boat by miles,” Williams said. “People’s main mistake is not knowing the local economy. Then to compare it to all of these internet value sites — they will give information they get off of our MLS (Multiple Listing Service). But what they don’t do is update information later. Giving old inaccurate information can cost the seller a lot of money.”
Appraisers and websites that are not familiar with a market similar to Grayson County will often struggle to determine a true price on a property. Many homes within the county will have acreage and storage buildings or barns that need to be taken into account. Alternatively, websites may use a formula that calculates value based on square feet and age but does not take into account the updates or lack there of within the home. All of these things affect how much someone is willing to pay for a property, which should be the true value of a home.
Williams explained many sellers use online value calculators because of convenience. He said what they don’t realize is local Realtors are happy to perform a rough estimate over the phone and to email comparable homes over quickly and easily. After that, if the seller is interested in receiving a more accurate report, the agent can go out to the home and create a more detailed report.