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This work-for-hire piece was published in Washington REALTOR® News Magazine (Volume 7 Issue 2, June 2007) which is the Bimonthly Publication direct mailed to over 27,000 REALTORS®. Word Count: 902 NO
REPRINTS What
You Need To Know About Home Valuation Web Sites By Laura J. Christian The explosion of the Internet has changed the face of business giving more power back to the consumer. A wealth of information and misinformation is now just a mouse click away. This trend is readily apparent in the home buying and selling market as well. The 2006 NAR study found that 65 percent of Washington state home buyers use the Internet regularly to search for a home, with 74 percent viewing the Internet as a very useful tool in the home buying process. One of the fastest growing Internet tools for real estate are home valuation websites. Sites such as housevalues.com, devenio.com, realestateabc.com, homevaluehunt.com, and housevaluefinder.com tantalize consumers with a wealth of information. Even sites like Seattletimes.com is now offering home valuation. The biggest player currently is headquartered right here in Washington, zillow.com founded by Richard Barton former CEO of Expedia.com. These home valuation sites continue to gain in popularity and as such more REALTORS today are faced with clients coming through their door with one of these home valuation estimates clutched in their hands. Some in the industry view these consumer-driven services as "the enemy" that cuts the agent out of the process while promoting FSBO. Others look at it as simply another tool that can be used by both consumers and agents alike. "[Zillow] is designed to compete with companies like HouseValues and LendingTree, both of which use home valuations as lead generation tools for Realtors. With Zillow, it's more about FSBO/seller empowerment because the consumer can get the information without being referred to a Realtor (sic)." (Blanche Evans, Realty Times) Whatever your take on these sites may be, you cannot ignore them. Their popularity is booming and your clients are most likely using them. One of the biggest draws for consumers is that the information provided by these home valuation web sites is free and anonymous. A consumer need not give out any personal information in order to utilize the many benefits from these sites. Yet providing a free estimate is not all these sites do. They also provide the consumer an opportunity to survey neighborhoods and take "virtual tours" without ever leaving their house. A consumer can look at individual home data (such as number of bedrooms/bathrooms, square footage, year built, etc.) and can track the historical value. They can see how a home's value has changed over the past year or even ten years and compare that data to each home in its surrounding area, city, state, or all the way up to the entire county. Consumers are also able to access satellite and aerial pictures of many homes, with more being added daily. With this information at their finger tips, these sites can be useful in helping clients narrow down what they are looking for and identify their budget long before they even walk through an agent's door. But are these sites accurate? Not really. Consumer powerhouse Zillow.com claims to fall within 10 percent of actual selling price about 62 percent of the time. That is an awfully wide margin of error. As a comparison REALTORS come within 99 percent of list-to-sales price according to the NAR. "The online valuation sites are fun, but they don't bring much accuracy to the party," (Blanche Evans, Realty Times) The data these sites provide is not new, they just provide it in a fresh consumer-friendly way. These websites utilize public records, such as property tax information and market analysis, to auto generate their values that are updated daily. These valuations rely on the accuracy of public records which have been known to contain errors. They also do not provide the whole picture and as such some of these sites now let home owners adjust their own home data in an effort to capture home renovations and improvements. These edits are not verified. Seattle REALTOR Terry Miller checks Zillow because many of her customers do. But she doesn't use the "Zestiments" to price properties. "You can't accurately price a home you haven't seen, and Zillow is a database program, the computer cannot tell if the home has a beautiful kitchen remodel or if it is falling apart. The exterior shot may look impressive, but you may not see the next door neighbor is parking on their front lawn." Even though the accuracy of these sites has been called into question by many industry experts, consumers liken it to Kelly Blue Book and trust the information they are receiving. So what can you do? Do your homework on these sites. Go to them, check them out, read their FAQs and get to know how they obtain their data and how they update it. The next time a client comes to you with an internet estimate you can use it as an opportunity to educate them. These home valuation websites can be used as a tool, but they cannot provide a complete picture, nor can they help with transactions. By focusing on the customer service aspect and looking out for your client's interests you can make yourself invaluable to your consumers. Even with their inaccuracies these free home valuation websites do not appear to be going away any time soon. In fact, with their growing popularity we can expect more variations to pop up in cyber space. An agent who understands these sites and keeps up on the industry can continue to grow their business with a new tool in their pocket. |
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