Computerized Home Valuation Method from Public Data Sources
Some local county tax assessor web sites provide this kind of valuation, which may use home sales history from specific periods matching that county’s tax appraisal cycle. These valuations are intended to help homeowners understand how their own home’s property tax valuation was established. They are generally not useful at all for determining current market value, because they are many months, if not years, behind the market.
Some non-governmental public web sites also use county tax assessor data, with varying degrees of accuracy. Recently, a couple of totally computerized home valuation web sites claim to use more recent sales, as well as past sales, to determine a home’s current market value. However, feedback from Realtors in many markets around the US indicates that estimates from these sites are generally way off the mark, especially in markets where appreciation is higher or lower than the national averages. Our analysis of the totally automated estimates compared to our own estimates for the same properties in the Denver Metro area real estate market, a low appreciation rate market, indicate that the automated estimate for most Denver area properties is only accurate to about +/- 10%, which on a $300,000 property could be a $60,000 range.
All of the computerized valuation sites use average sold price per finished square foot values for the entire neighborhood, and do not accurately consider lot sizes, condition, location, views, or more recent market sales activity. They also cannot differentiate between walkout and non walkout basements, a major valuation factor in the Denver real estate market. Computerized valuations are also only as accurate as the information about the property in the local county records. Many times, basement additions and other improvements are not recorded, and bedroom and bathroom counts are not accurate. Another significant issue in many markets, including the Denver Metro area, is that sold prices reported to the county may be inflated because they will not include adjustments for seller concessions, which could have a significant impact on actual net sale prices. Seller concessions are only reported in the local MLS system, and are only available to licensed Realtors.
A Mini-CMA by a licensed real estate agent is generally much more accurate than any of the computerized valuation systems.