Napa Valley Valuation BLOG

By Daniel Brauning

The recent boom in real estate value trends led to a variety of online AVMs - Automated (Real Estate) Valuation Models. The most prolific may be www.Zillow.com. There are numerous others and they are a good starting point for market data on a specific piece of real property.

We are often asked; “How accurate are these websites” and our answer is; “We really don’t know”. But they are a good starting point because they do show which properties have recently sold and most now show active listings with photographs.

The problem lies in the algorithms that the site creators use. As a typical end user, we could never decipher the mathematics used to calculate a home value on these websites. Also, we don’t know what data they are basing their calculations. However, it is safe to assume that they use varying public record sources for data. The problem with public record sources is that public records are often incomplete or incorrect and most, if any, report sales concessions nor do they define less than fee simple transactions.

The active listings and recent sales shown in Zillow.com appear to be the most accurate information provided on the website. A valuation number on a house that has not sold for many years may not be very accurate.

Using Cyberspace to get a quick idea of value is a great stating point. However, in these uncertain times, for greater accuracy, an appraisal by a qualified appraiser could save headaches and money.