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| LIFE IN SOLERA | SEPTEMBER 2023 | 13 The bottom line is that home value estimator tools are not that accurate. Most online estimators have a median error rate of approximately two percent to seven percent. That might not sound like much, but it can represent thousands of dollars on a home sale. These figures are from Zillow and Redfin, which offer some transparency by publishing regular accuracy reports. A common issue with estimator tools is that their assessments are based on sales prices of "similar" properties. Algorithms need to make assumptions about your property and other homes in the neighborhood that may or may not be true, which inevitably leads to mistakes. For example, two Trillion models may appear to be the same to an algorithm, but if one has a renovated kitchen, and one does not … an updated kitchen can add $20,000 extra to the value of the home. How to get the most accurate home value estimate: The best way to get the most accurate home value estimate is through a Comparative Market Analysis (CMA) by a real estate agent. A CMA is completely free and comes with no obligations. You can ask an agent for a CMA without actually having to commit to using that agent to sell your house. Why are CMAs better than online estimators? CMAs are in-person assessments performed by a real estate agent. Unlike an online estimator which relies on an algorithm, a CMA is curated to your specific property. That matters because no two houses are exactly the same, so you need a person who is trained in home valuations to see your home, in person, to determine how much it is worth. Your Realtor will handpick different properties that are most similar to yours, based not just on quantitative measures, but on qualitative measures that an algorithm can't compute. For example, an agent will consider whether your house has a desirable view or upgraded flooring — things that most algorithms struggle to put a dollar value on. Of course, you want to select a realtor who is a local expert and knows Solera better than an algorithm ever can, so they know the nuances of what buyers are looking for. Local knowledge is difficult for an algorithm to compete with. Your Realtor will use houses that are far more comparable to yours and therefore get you a more accurate home-value estimate than an algorithm ever could. Realtors also have access to the Multiple Listing Service (MLS), which includes photographs and detailed information about real estate transactions. Using the MLS, your Realtor can see photos of comparable properties to get a better idea of their condition, which an algorithm can't measure, but which makes a huge difference in the list price. Source: CNN Business, Zillow & Redfin Accuracy reports How Accurate Are Home Value Estimators Such As Zillow And Redfin? By Diana Mangan, Realtor and Resident

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