Why Buyers and Sellers Shouldn’t Trust Online Real Estate Price Estimates

Whether you’re looking to buy or sell a home, chances are you’ve looked at a few real estate websites to see what the market is like out there right now. A lot of these sites, while very helpful in other ways, can tend to be a bit misleading when it comes to prices.

If you’re a buyer, these sites take the price the home is listed for and then break it down to give you an estimate of what your monthly mortgage might be. While sites like Zillow and Trulia state that these numbers are just estimates, a lot of times people see them and believe that is truly what they will have to pay monthly, and have hope they would be able to afford the home they’re looking at. These mortgage estimate numbers can be wrong because it doesn’t take into account how much of a down payment you will be paying, which can vary depending on your loan and loan program you’re using, or how much you can afford. Some loan programs are as low as 0% down payment, while others require the 20% customary down payment. Another reason these numbers might not be accurate is that money such as taxes and Escrow payments that get tacked onto your monthly mortgage may vary greatly depending on when you buy.

So then, what should you do if you are a buyer trying to figure out what you can afford? We recommend first speaking to a lender and getting prequalified to buy. This will not cost you anything and it will give you an accurate dollar amount of what you can afford in a home and in a monthly mortgage payment.

If you’re a soon to be seller, you go on these sites to look at what they’re predicting your home might be worth. Sites like Trulia, Zillow, and Realtor will have an estimate of what a home is worth when you look up the address, and this may be a number you look at to help you determine what your home is worth. The problem with these numbers is often times they are derived from automated valuation models and can be very inaccurate. What your home is worth depends entirely on what kind of real estate market you are in (because it varies from town to town), what your home looks like compared to other homes, the amount of land you have, upgrades done, and so much more!

What we suggest for people looking to sell their home is calling a real estate agency. Most agencies will do a CMA for free. A CMA is a Comparative Market Analysis, which compares your home to others like it that have sold in the area with similar criteria (area, year built, number of bedrooms, upgrades, etc). This will hopefully give you a very accurate idea of what your home is worth and what you can list it for rather than just having a guesstimate.

We don’t want to shoot down the real estate sites we love, we are just saying to read what even they say on their websites… that those numbers are estimates and can be inaccurate and not precise depending on your home, your situation, and so many things. For more accurate numbers, follow our tips above about seeing a lender or contacting an agency.

If you need help with either of those things, we would love to assist! You can call our office today at 928-771-111 to speak to an agent about helping you get pre-qualified or creating a CMA for your home to find out how much it could be worth.

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