The Internet has forever changed the way Real Estate works and primarily it has been for the better. However, there is a lot of dangerous misinformation floating out there in Cyberspace. I'm talking about online home value estimators. I'm not going to name any names but you know the ones that I mean. A simple search of "What's my house worth?" will bring forth a dizzying number of websites ready to estimate your home's value with a few simple clicks of your mouse.  After entering my own address into three well known online calculators I found that the possible "value" of my home varied by as much as $60,000! This kind of discrepancy can mean trouble for buyers and sellers.  Before you venture into the world of online valuations, there are a few of things to remember:

1.      Estimates/Valuations ARE NOT Appraisals! The most important thing to keep in mind is that most websites are offering you an estimate of what a particular home may be worth based on information taken from public tax records and recent sales. It is not uncommon for tax records to be out of date or just plain wrong. Sometimes, they do not include information on additional square footage from additions or whether or not a basement is finished. These errors can cause large discrepancies in the estimated value of your home. My home's valuation was skewed from the start because my tax record does not include one of my full bathrooms. The information offered by these sites should be used to give you a general idea of the market in your area, nothing more.  In Maryland, appraisals are conducted by licensed men and women who have completed a minimum of 150 hours of courses approved by the Commission of Real Estate Appraisers and Home Inspectors and compiled at least 2,000 hours of appraisal work experience over a period of at least two calendar years (For more information go to http://www.dllr.state.md.us/license/real_est_app/reareq.htm). Beware of anyone or any website claiming to offer you an appraisal for a fee without anyone actually setting foot inside your home.

2.       What's the Worst That Could Happen? For FSBOs, relying on the Internet as your primary source of Real Estate information can be tricky. Using my own home's online "valuation" as an example, I could potentially list my home at the lower end of the estimate and possibly lose thousands of dollars. If I priced my home nearer to the top, my home could sit on the market for months while I continue to make payments as the market slides south. Buyers using these online tools should be cautious as well. If the calculator is not accurate and you base your sales price on information from these sites, you could potentially make an offer that is more than the property is worth.

3.      So Who Can Tell Me What My House is REALLY Worth? Quite simply, the market will tell you what your home is worth. Some of the online home value calculators do not take current listings into account. For example, if past sales show home prices to be around $300,000 but current comparable listings are priced no higher than $275,000, what should you do? What is the average number of days on the market in your neighborhood, are the other homes foreclosures, are they in poor condition, or are they as well maintained as your home? Websites don't always provide this information and if you don't know the answers to these questions, your home may sit on the market for a longer period of time if priced at $299,900. Past sales only tell part of the story and when you are viewing them online, keep in mind that only the most recent sales are relevant. Sales from 2007 and 2006 have little to no bearing at all on current prices.

Ok, all that being said, you can find a wealth of Real Estate information online, just be careful as to how much weight you give it. A knowledgeable Realtor will have their finger on the pulse of your local market in a way that no website or computer generated formula can. You should use all the resources that you have available to you to make the best decision for your family and I hope that will include a no obligation consultation with me and my team. We are here for you!

Courtesy: Andy Werner & Associates. All Rights Reserved. 301-721-0000 Contact Me.