Does It Really Matter Who Tells You How Much Your Property Is Worth?

Appraisers have been accused of "sour grapes" on the whole AVM vs. human valuation of residential real estate. So, just out of curiosity, I ran six addresses that we appraised in the last six months through the Zillow software to see how close the numbers would come up. I was shocked at the results! I had always assumed that Zillow would tend to overvalue property and that only fueled homeowners' beliefs that their property is worth more than it really is. But, not one property came in at the value that we appraised it for! In fact, every single property came in on Zillow for thousands less than we appraised it for! The smallest difference was a paltry $12,000.00 (enough to make or break a purchase or a refi, for sure!), and the largest difference was an astounding $280,000.00! Averaged over the six properties I researched, Zillow undervalued properties at $141,000.00. There are many factors that contribute to the differences, but no matter which side of the argument you are on, the numbers prove that there is no substitute for the human factor in property valuation!
I read a great article recently, also, in The Detroit Free Press about AVM vs. Appraisal. It was written by Kenneth R. Harney, who is the Washington Post's real estate guru. He says, "Bottom Line: Even FNC calls appraiser-collected data "the gold standard." AVMs can be useful starting points - although Zillow's free "Zestimates" have been criticized for frequent inaccuracy by a variety of groups,.......If you truly want to know what a property is worth, don't settle for less than an experienced appraiser, live and on site."
To read the entire article, visit washingtonpost.com and search for articles by Kenneth R. Harney.
I welcome comments on both sides of this argument! Have a great day!