Why Don't Online House Valuations Match?
"What's my house worth? I'll check it online and get the value."
This is what thousands of home owners and interested buyers do daily on the largest home listing sites.
But why do the values vary so much going from one site to another? To answer this question I decided to compare the home value of a single family house in Las Vegas. The sources for the value were based upon the Realtors Multiple Listings Service, Zillow and Trulia.
The Greator Las Vegas Association of Realtors MLS has been the mainstay for home valuations for decades. Homes that are listed by Realtors are recorded in the system as the deal progresses until sold. The homes can be searched in many ways and the value can be derived from the data.
Zillow and Trulia are online housing sites. These sites list homes for sale or rent and they will locate and show these homes to prospects. Additionally, the sites will give property values on specific homes. Home prices are derived by an algorythm utilizing past sales.
Just to see how the services compared i selected one house in the Northwest area and checked the three sources.
The results of the search showed:
MLS indicated the home price was approximately $222,000
Zillow gave a $241,278 price.
Trulia gave a $222,628 price.
The MLS and Trulia were both very close and Zillow was significantly apart.
Which was correct? As we know, until the sale is closed we won't know the actual sales price. We know a willing buyer and willing seller need to come to an agreed price and it isn't dependent upon the the the recently sold in the area.
In summation, the three services are close enough. Only a real buyer and seller can make the price stick.