PETALUMA CALIFORNIA - PETALUMA Homes and Real Estate For Sale

Article

According to a colorful American legend, that steel-drivin' man John Henry beat the steam drill in a sweaty contest that brought him both vindication and death from exhaustion. One hundred fifty years later many of us are still battling, perhaps less heroically, the new inventions that encroach on our professions. Since the advent of the Industrial Revolution, replacement of people by machinery has been a persistent theme. In this age of computer technology it's less about contraptions performing physical tasks and more about software supplanting human thinking. Yes, the computer is a valuable tool for calculation and analysis, but it is a mistake to rely on computer programs in areas that necessarily involve intuition and judgment.

Lately many people say they have discovered the value of their homes by "looking it up on-line." The internet offers access to sites with automated valuation programs, the most popular being Zillow.com. Zillow makes it very clear to users that its trademarked "Zestimate" is not an appraisal and cannot take the place of one. The site even encourages consultation with real estate agents and professional appraisers to obtain a better idea of value. But it does purport to provide an estimate of market value based upon "zillions of data points" and application of a "proprietary algorithm" (i.e., a secret formula). The problem with this notion is that while valuation of real property begins with collection of data, a determination of value cannot be made by a formula. Some things just aren¿t mechanically quantifiable. Try to imagine a computer program that would gauge your attractiveness to the opposite sex based on DMV data.

A real estate appraiser's opinion is the result of observations, comparisons, and non-formulaic judgments about differences among comparable properties. The appraiser considers elements of design, quality of construction, appeal, observed condition, neighborhood trends, and even special circumstances that may have influenced a sale, all of which are invisible to internet estimators. A Realtor's estimate will not be called an appraisal but may come in the form of a "comparative market analysis." That report may include statistical averages and medians, which many people find interesting, but your Realtor should explain to you that those calculations are not determinants of your property¿s value. The best estimate will be made through observation and application of good intuitive thinking and judgment. It really is more art than science. It helps that we have actually seen most or all of the properties used in our reports. Some of my more experienced colleagues are like wizards at divining the right number after viewing a property.

Where there is relative uniformity among homes within a large radius around a subject property, there is a greater chance that an automated valuation will be accidentally on the money. Where there are variations in age, style and construction, custom homes mixed in with production homes, additions and modifications, the conclusion can be wildly off. Zillow reports that in California, for which the site has more complete data than in most other states, its "Zestimates" are within 10% of a property's actual selling price 69% of the time. Yikes. With that track record, I would have been out of business long ago. So why do some people think they have their answer from an on-line source? Sometimes it's because they see a number that is pleasingly high and therefore takes on the appearance of a stone tablet from Sinai. And there is no denying that technology is seductive. The automated programs are quick and easy and eliminate the terrible inconvenience so many people dread -- talking to a person. Programs like Zillow's are fun to play with, and I'm not suggesting they should be avoided, just not relied upon. Pay attention to Zillow's advice and use the program as a starting point for discussion with a professional.