Online value estimate off $50,000
Both home-buyers and home-sellers should beware of online pricing tools on popular, well known listing portals. If you are a home-seller, you could potentially be losing tens of thousands of dollars if you were ever foolish enough to rely on an online estimate of value. There is also a real danger for home-buyers, especially in a market like we are in today. If you rely on one of these estimates, and base your offer on it, you may lose out on a well priced house, that meets your needs, because of relying on faulty information. And in a market with limited inventory, it may be very hard to find another home with similar characteristics.
One example of our listings will illustrate the point. Our company just closed on 5 Jefferson Road in Windham. The online estimate of value was $480,027. The property just closed with a sales price of $529,900. If a seller had relied on this estimate of value they would have lost $50,000. Some other examples: A listing on 4 Meadow Road in Windham is priced at $270,500 with a value estimate of $299,767; A listing at 6 Horne Road is priced at $949,900 with a value estimate of $1,173,903. There are many others. As you can see, the value estimates are off both on the high side and the low side. Some of the estimates are fairly close... but should you take the risk of relying on this information? The obvious answer in no.
I have been in the real estate business in southern New Hampshire for over 35 years. There is just no substitute for a professional Realtor's opinion of value. As a seller, you should have at least two to three market value opinions prepared on your home. There are subtle differences between homes that make a huge difference in their "market value." Condition and age often trump square footage. Locational differences also make a huge difference. Computer programs no matter how well conceived, can never replace the opinion of value provided by a real estate professional. Please, no matter whether you are a home-buyer or home-seller, do not rely on online valuations!