You've seen the ads flooding your Facebook feed. "What's your home worth?" You might have even clicked on a few of them. But online home valuations are mostly a waste of your time. Here's why...

What's an online home valuation?

An online home valuation is a quick and easy way for you to get an estimate on the value of your home online.

How does an online home valuation work?

Websites providing valuations use a combination of data points about your home's size, features, and location as well as information from public records, and market activity to quickly generate an estimate of its value. 

What can you learn from your online home valuation?  

Most online home valuations will give you a broad value range for your home and might even show you some recently sold comparable properties too. 

Estimates cause confusion more than clarity

Online home valuations are a great tool for curious homeowners to find out more information, but they're not especially helpful in determining a go-to-market strategy if you decide you really want to sell.

The evidence not any more clear than when the CEO of Zillow sold his home in Seattle earlier this year. The estimated value of the home calculated by his company was $1,750,405. But the home actually sold for 40% less than the estimate, at $1,050,000. Bummer.

Image showing the difference between the estimated value and final sales price for Zillow CEO's home

If it's just an estimate, what's the big deal?

In a vacuum, online home valuations are not harmful. They are a great starting point for you to understand how much your home might be worth, and what the general market conditions are like in the neighborhood.

Problems can materialize when homeowners take their estimated values too seriously when they finally decide to sell. While estimates have a relative level of accuracy, it's certainly not enough to determine how much your home will actually sell for, or what the experience will be like.

For instance, Zillow's own reporting shows that only 43.2% of their online home estimates in the Portland metro area are within 5% of the final sales price (the rest are even less accurate). The median sales price in Bend is currently $365,000. A 5% error rate results in over $18,000 in uncertainty.

Doesn't Bend Station provide online home valuations?

Yup, in fact I built an entire landing page dedicated to helping people get an estimate of their home value. Nobody fills it out.

To be honest, earlier this morning I was trying to figure out a way to advertise it. But I'm taking it down. I decided to write this post instead.

So why are online home valuations mostly spam?

I'm so glad you asked. Online home valuations are simply advertising tools. They're designed to capture your contact information, which then gets sent to somebody who will send you an endless string of marketing emails (they likely didn't even write themselves), in the hopes you'll be responsive to their requests for more information about your situation.

When you start getting serious about selling your most prized asset, consult with an agent who will give you unique and original thoughts about your home and who can help inform your decision by giving you a level of context that simply isn't available online.

Don't let a silly advertisement on Facebook sway you, or let an impersonal algorithm pick one for you. You deserve to control the sales process. 

What you should do instead

Research, scrutinize, and interview. Real estate brokers are a dime in dozen in Central Oregon. You probably already know 2 or 3. But just because your neighbor has a real estate license doesn't mean they're actually the best fit for the job. It's absolutely critical to hire the right agent, especially in a hot sellers market like we are experiencing today. Most importantly, don't choose under pressure.

A lot of people in Bend are trying to "move up" now that values have recovered a bit. This involves selling the home they're living in, while also trying to buy their next home. It's a careful art that only the most experienced agent can help facilitate gracefully.

That 5% error rate in a home valuation estimate could be the difference between having a downpayment for the next home, or not. And just because your home has a certain value estimate tied to it, doesn't mean there are actually buyers out there willing to pay you for it. Only the most plugged-in agents really know the volume of, and preferences of buyers in the market. And it shifts weekly.

What sets the best listing agents apart

Simply putting a sign in the ground is not enough. Neither is just listing it on the MLS. A lot of agents will boast about how they'll "send your house to hundreds of websites" which would be a cool feature if it didn't already happen automatically, without any effort on their part.

There are some very specific things the best listing agents can do in order to expose your home to the most qualified buyers and get you the top dollar you deserve. 

Front end marketing

Top listing agents pay for advertisements on the most highly trafficked real estate websites so they're assured to field inquiries about your home, instead of the questions going to other agents. They have a Facebook marketing strategy that targets your friends, neighbors, or qualified buyers relocating from the Bay Area and Seattle. They always use a professional photographer. They use video to tell a story about your home and make sure the content gets widely distributed. They have sophisticated email and phone technology which ensures buyers get information immediately, not the next day. They can explain how all of this works.

Back end process

Top listing agents dynamically price homes in order to get the best result for an individual homeowner. They have all of their marketing materials organized, published, and accessible before the home gets listed. They make your home available only at specific times and help you best prepare for showings. They try varied strategies, like only responding to offers after the property has been on the market for a week or longer. They show up for the appraisal. They help make temporary lodging arrangements for your pets

So when you're ready to approach a real estate agent in Bend about pricing your home, don't let them assume they've already earned your business from the start. You're going to shell out a lot of money to sell your home, so make sure you have some understanding of how it's all going to get used by the agent you hire. Don't just hire the agent who gives you the highest value estimate of your home, either. Be prepared to ask tough questions. 

Home pricing is a marketing feature, it's not etched in stone

At the end of the day, only a willing and able buyer can tell you how much your home is really worth. You might get dozens of estimates about your home value, but the one that matters most is the one that comes in the form of a signed sales contract. And the distance between an online home valuation request and completing a sale is a hundred miles wide.

I'm taking on a handful of seller clients

My original plan was to only work with buyers for my first two years in Bend. I am still very dialed into the Bay Area scene and have mostly been helping other people relocate here. But a few local homeowners who know about my unique experience have expressed interest in selling their homes. After some deliberation, I'm excited to start taking on a handful of seller clients this year. 

My services aren't right for everyone though. I'm the type of agent who will tell you to take your 1990's JCPenney portraits off the wall if they're distracting. I'll expect you to complete paperwork using online tools, including your phone. Your house will get featured in videos. I'll want to host a major open house just for your neighbors (because they want their friends to move closer to them). There will be a rigorous schedule. I'll want to become friends with you. It will be challenging. It might be fun.

If that doesn't sound right for you, I can help you pick the best agent for your situation. Our office alone has 100 great ones. Someone else might be a better fit.

I'm easy to talk to and won't ever pressure you. I'm happy to meet for a coffee or a beer anytime to talk about real estate, without any expectations of future business. I just love this stuff. But please, don't believe that a computer can decide what your home is worth.

Only a local human expert can help you really gauge the market.

Greg Fischer
(541) 408-9239

Additional reading

Learn more about the Zestimate - Zillow

Don’t Rely Too Much on That Online Home Value Estimate - NerdWallet

Zestimiss: Why did CEO Spencer Rascoff’s home sell for 40% less than Zillow estimate of $1.75M? - GeekWire