You may be expecting me to lecture you on getting your inspections, learning all you can about the condition and title of a property, and pursuing your “due diligence”. That is not my meaning here. I have found that in a well intentioned effort of “due diligence”, many buyers are turning to online resources to determine the value of property. This is where a buyer truly must “beware”.

There are a handful of sites to choose from now, Domania, Zillow, Trulia, Propsmart, just to name a few. It must be said that no amount of data, or interpretation of data can replace the knowledge and experience of a reputable real estate broker that knows their local market like the back of their hand. I’ve run across a fair number of buyers now that have tried to undermine my pricing after having “researched” online. And the most recent was showing all the buy signs, asking about price and terms of an offer, etc., until he went home and did his “research”. No matter that I provided him with a detailed comparative market analysis. He just researched his way out of a good home at a good price.

Each of these sites operates a little differently, with Zillow actually being the most credible and unbiased. But let’s take a look at Zillow. They start with information from the county tax records. In my experience, the tax records are fraught with inaccuracies, I never rely on the tax records for much more than the address. Then Zillow takes recent and not so recent sales over a very broad range of properties in an area. A 1000 square foot house is going to have a very different price per square foot than a 3000 square foot house on the same street. In a “hot” market, sales prices from even 6 months ago can be outdated. So Zillow takes all of this inaccurate information about each and every house, and comes up with a Zestimate, which is the median price of their broad price range.

My most recent listing had a price range of $80,000. Then a few clicks into Zillow and they tell you that they have a margin of error. In the Portland/Salem (what!?!) area, the margin of error is 5.4%. On a $400,000 house, that is a give or take of $20,000 or so. Now we are at a $100,000 dollar “window” that my listing falls into. Ok, what home is not going to fall somewhere within a $100,000 range?

I will say, though, that Zillow has recently added the option for agents to go add their listings to their database, with the ability to update the information about the home and create your own Estimate. Although, this is absolutely on the honor system, so your neighbor can go and maliciously change all the information about your home.

Remember earlier when I said that Zillow was the most credible of these sites out there? Scary, isn’t it? Trulia is well intentioned, and catering to the real estate agents, but is completely misguided in that they rely solely on agents for active listings, and tax records for sold data. And don’t even get me started on Propsmart. They politely tolerate agents, vaguely state that they “crawl” other sites for their information, and have a very poorly run and mediated “community” format that allows postings from anyone all over their site, but provides no way of policing the community activities.

So, Mr. Buyer, please beware these sites. True, they may be very well intentioned and have a lot of flash and dazzle, but they cannot replace the knowledge and experience of a seasoned, full-time professional agent that knows their local market well. You would be better served asking your agent for a CMA, and getting out and exploring the neighborhood and surrounding community of any home you consider buying.

Opinions expressed in this article are the opinions of author, and not to necessarily the opinions of Meadows Group Inc.
All rights reserved on all original content, non-original content is given credit | Michelle Berry | 2009