In my estimation, AVMs (Automated Valuation Models) like Zillow.com, Redfin.com, or Homevalues.com’s valuations are 90% correct. The question is, whether or not your home falls in the 90-percentile correct, or the 10-percentile incorrect value. Let’s be clear: the computer programs and algorithms used in today’s real estate world are only a marketing tool. It creates a desire for action, then provides you with a quick solution. It targets those who are interested in the real estate market, but not enough to invest in a professional appraisal service. It’s quick and easy. That house you’ve been dreaming about is now in your price range, so let’s talk to a local agent, who is conveniently waiting for your call. Or, if you’re cash short and need to find money, you may look to refinancing your home, so let’s talk to a local agent who happens to be conveniently awaiting your call.
AVMs are “magic”
Let’s take for instance, the value for your home is $100,000, as per Zillow.com’s Zestimate. Look at the Zestimate range, and you will see a price range of $50,000-$150,000. How did it come up with that figure? It’s magic. Just like Google. Magic.
What do the algorithms know?
You can’t figure out how it found that value, because the complicated algorithms used are not available to the average person. It’s like magic. I ask the internet for a question, and I’m ready to bet the farm on the answer. Don’t be so naive.
People, not computers, buy homes.
Computer algorithms don’t buy, live in, and raise a family in homes—people do. So, don’t rely on a computer algorithm to give its opinion of others’ dreams, hopes and desires. Let a knowledgeable, experienced, licensed real person do that for you. Specifically, a professional real estate appraiser. The investment is worth it every time. With a completed, detailed, full report from A1 Los Angeles Home Appraisal, you can understand why the opinion value is, or isn’t, what you expected–with the option to actually contact the appraiser who completed it to clarify any concerns. That’s why courts and lenders don’t use Zillow and Redfin for the opinion of market values. If you’re going to bet the farm, know what the value is before you bet.