Algorithms Versus Agents' CMAs
February 25, 2013
Oh how I wish there was a mathematical formula for determining the market value of a piece of residential real estate - or, for that matter, any piece of real estate. Agents and appraisers still rely on the data found in multiple listing services and in public records. When the data is compared with the description of a subject property, appraisers and agent come up with an "opinion of value" The number of "like" properties available in the data base can make the determination of value easy, if plentiful, and difficult, if scarce.
Zillow is a web site that was launched approximately ten years ago. When you type in an address, the site will post a "Zestimate". It is my understanding that "Zestimates are arrived at by entering, data from public records, from multiple listing services and sometimes from real estate agents' input into algorithms that then compute a value for the subject property. As with any computer program, the accuracy of the result of the answer depends on the accuracy of the data inputted.
As a real estate agent who would love to have a program that gave me the market value of a particular property, I would embrace such an easy solution to on of the more challenging jobs of a real estate agent.
However, the Zillow Zestimates are a good starting point, but are not the answer to determining the current market value of a particular piece of real estate. The old fashioned Comparative Market Analysis (CMA) may still give the best answer to "what's my property worth?" A professional real estate agent who works in the area every day is still the person to interview and whose opinion of value is worth serious consideration.
Oh how I wish there was a mathematical formula for determining the market value of a piece of residential real estate - or, for that matter, any piece of real estate. Agents and appraisers still rely on the data found in multiple listing services and in public records. When the data is compared with the description of a subject property, appraisers and agent come up with an "opinion of value" The number of "like" properties available in the data base can make the determination of value easy, if plentiful, and difficult, if scarce.
Zillow is a web site that was launched approximately ten years ago. When you type in an address, the site will post a "Zestimate". It is my understanding that "Zestimates are arrived at by entering, data from public records, from multiple listing services and sometimes from real estate agents' input into algorithms that then compute a value for the subject property. As with any computer program, the accuracy of the result of the answer depends on the accuracy of the data inputted.
As a real estate agent who would love to have a program that gave me the market value of a particular property, I would embrace such an easy solution to on of the more challenging jobs of a real estate agent.
However, the Zillow Zestimates are a good starting point, but are not the answer to determining the current market value of a particular piece of real estate. The old fashioned Comparative Market Analysis (CMA) may still give the best answer to "what's my property worth?" A professional real estate agent who works in the area every day is still the person to interview and whose opinion of value is worth serious consideration.
posted by shirley harry at 8:42 AM
0 Comments:
Post a Comment
<< Home