Be Careful of On-line Home Valuations

A recent trend in the Real Estate industry is the use of Automated Valuation Models (AVMs). These re used to determine the value of a home.

There are several web sites that will provide an estimated value of your home through the use of an AVM and one of the more popular of these sites is Zillow.com.

Recently Zillow.com has landed in the hot seat over the accuracy of its home valuation tool.

The National Community Reinvestment Coalition, a Washington, D.C.-based non-profit that promotes equal access to credit and capital for underserved communities, filed a complaint against Zillow with the Federal Trade Commission. It says that Zillow's valuation "mechanism is highly inaccurate and misleading to consumers."

The NCRC also notes -- citing its own audit -- that "Zillow is off the mark with its home value estimates more than two-thirds of the time".

There are many reasons why an AVM may be off the mark on placing a value on your home. As with any calculation or formula, assumptions must be made and the accuracy of the result is only as good as those assumptions.

The primary assumption that is often made is that all houses in a community are essentially the same. That is, they are in the same condition, the same view, the same building materials, etc.

So, for example, say you have a very nice 2,500 square foot, 4 bedroom, 3 bath home with ceramic tile, hardwood floors, hard surface counter tops, new appliances, new roof and update bath rooms.

And now lets say that recent sales near you are also 2,500 square foot, 4 bedroom, 3 bath homes but have no upgrades. In other words, the home has the original carpet, roof, appliances, etc.

In this example, an AVM may substantially under value your home.

Call me!  I'm Free!

Home are best estimated on an individual basis where the uniqueness of the home can be considered in determining the it's optimal value.

I will be more than happy to provide you with a valuation of your home at your convenience. There is no cost or obligation to you.

If you are interested in this free service, give me a call at or send me an email. 

Chuck

(904) 923-5852

ChuckGuinn@WatsonRealtyCorp.com

Welcome to my new blog site where we can post comments about the Jacksonville, FL real estate market.

As I'm sure you are aware, in 2006 the Jacksonville real estate market cooled down from the torrid pace that was set in 2005. In 2005 you could put your house up for sale and receive offers almost immediately. The market was increasing at over 15% per year.

Then almost overnight the market came to a screeching halt, or so it seemed.

Actually, the real estate market slowed to a more normal pace.

A recent article in the Jacksonville Times Union showed that prices in most areas of Jacksonville have flattened and not declined like they have in some areas of Florida.

Here is a reprint of an article in the February issue of NEFAR News (a magazine for the North East Florida Association of Realtors - NEFAR).

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"Is Now The Time to Buy? I Think So!

"If the question is, 'Is now the time to buy?' - let's look at a few facts.

"December, 2006 rates of 6.15 percent make a payment-and-interest payment of $1,218 for a $200,000 mortgage. Should future interest rates increase to 10 percent as they were in the 90s, the same payment would correspond to a $139,000 mortgage.

"Is now the time to buy?

"Builder inventories are getting back to a manageable level and this will mean some the special deals will be disappearing.

"Is now the time to buy?

"Resale home inventories are up to near normal levels and that means some sellers will be giving up some of the anticipated equity built up over the last few years of ownership, with better pricing, so they can Rediscover their American Dream at a new level (with their new/ different parameters).

"Is now the time to buy?

"Lenders tell me that sellers who have a home to sell before moving to their next residence are using bridge loans to free up their back end ratios and give them more time to market their current home.

"Is now the time to buy?

"New bond money is available for first time home buyers and income limits have increased. New bond money is available for first time home buyers with income limits up to $90,000 - allowing many more people to discover their American Dream.

"Is now the time to buy?

"Real estate is local. Local rental rates are going up. Local unemployment rates are at new lows. The local First Coast economy is great.

"When it is said that the bottle is half full, I think instead that ours is way more than half full. So is now the right time to buy? I THINK SO!"

(Written by Hank Oltmanns, NEFAR President.)

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