Wondering what criteria ForeclosureRadar uses to determine Est. Value? I noticed it’s not the same value as zillow.com…? Can you give any details on how conservative/realistic this value is and how you come up with it?
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Thanks!
It is an “automated valuation model” or AVM. Very similiar to what Zillow or Cyberhomes does but every model is a little different and you will therefore find differences in value. Some of the title companies offer as many as 10 or 20 different AVM products.
In the end all AVM’s are questionable at best. Problem is they are based on pulbic records which often lack key information or are simply wrong. Two quick examples:
- In Discovery Bay, where I live, you can buy the identical house on a Park ($350k), a Lake ($450k), or on waterways that lead all the way to the Pacific ($650k). There is no way for an AVM to tell a difference between these 3 properties as they have identical lot sizes, square footage etc. As such AVM’s tend to be way off.
- My own home is shown in the public records as considerably smaller than it actually is because the county assesors office mistakenly entered first floor square footage, instead of the entire house. Again the AVM is way off.
The final thing I will say about AVM’s is that they tend to lag the market. So when? prices are going up tey tend to be too low, and when they are going down they tend to be too high.
The good news for Realtors about this is that sites like Zillow prove why a knowledgeable, local, market expert has value.
So why even offer them at all? They are still close enough to help keep you from wasting time chasing deals that make no sense at all. Time is money afterall.