Zillow and Redfin have attempted to automate just the valuation of properties (with enourmous resources behind them), and still aren't as accurate as traditional appraisers. It's easy?
Edit: Even Zillow agrees. There's a million dollar prize if you can do better.
So? Real estate agents aren't appraisers and shouldn't do "official" appraisals because of misaligned incentives (among other reasons).
Appraisals are kind of weird anyways, they are only an somewhat educated guess until someone actually buys the property and they are pretty individually subjective. My friend had 3 different appraisers come to her house and do three different appraisals and they all varied by quite a bit and one was absurdly high, much higher than the others, and extremely unrealistic (IMO). Appraisers also have information that algorithms don't because they actually go to the house and view the property with their own eyes. They can take into account better the condition of the property and "soft," more subjective inputs that you can only tell by actually viewing the property. It's not really directly comparable to an algorithm since there's just a subjective bend to the whole process and there's much more information available to appraisers.
Not only that but when the bank does an appraisal for a mortgage the appraiser's job is only to justify the selling price. They start with the agreed upon selling price and they use data to justify it, they don't go into it blind, they consider and analyze the agreement of sale as part of the valuation. Zillow obviously can't take that info account as Zillow doesn't have that information. So you're comparing apples (a market analysis based on public information) to oranges (a justification of a privately agreed upon sale price).
An appraisal is also cheap, especially compared to a real estate agent. Ours was a flat $425.
Don't professional appraisers actually go to the property and look around?
As for the rest, why should the process of selling a house require "expertise"? Apart from inspections, which require domain knowledge of infrastructure.
Getting the appraisal from the place that's selling to you seems like an inherent and obvious conflict of interest. Ideally the appraisal should be a flat flee from a third party.
In the context of your comment, what value do you see realtors providing w/r/t appraisals?
toomuchtodo|8 years ago
Zillow and Redfin have attempted to automate just the valuation of properties (with enourmous resources behind them), and still aren't as accurate as traditional appraisers. It's easy?
Edit: Even Zillow agrees. There's a million dollar prize if you can do better.
http://www.marketwatch.com/amp/story/guid/D24B68EC-4090-11E7...
just4themoney|8 years ago
Appraisals are kind of weird anyways, they are only an somewhat educated guess until someone actually buys the property and they are pretty individually subjective. My friend had 3 different appraisers come to her house and do three different appraisals and they all varied by quite a bit and one was absurdly high, much higher than the others, and extremely unrealistic (IMO). Appraisers also have information that algorithms don't because they actually go to the house and view the property with their own eyes. They can take into account better the condition of the property and "soft," more subjective inputs that you can only tell by actually viewing the property. It's not really directly comparable to an algorithm since there's just a subjective bend to the whole process and there's much more information available to appraisers.
Not only that but when the bank does an appraisal for a mortgage the appraiser's job is only to justify the selling price. They start with the agreed upon selling price and they use data to justify it, they don't go into it blind, they consider and analyze the agreement of sale as part of the valuation. Zillow obviously can't take that info account as Zillow doesn't have that information. So you're comparing apples (a market analysis based on public information) to oranges (a justification of a privately agreed upon sale price).
An appraisal is also cheap, especially compared to a real estate agent. Ours was a flat $425.
https://theappraisercoach.com/why-most-purchase-appraisals-s...
hueving|8 years ago
MichaelGG|8 years ago
As for the rest, why should the process of selling a house require "expertise"? Apart from inspections, which require domain knowledge of infrastructure.
dgfgfdagasdfgfa|8 years ago
In the context of your comment, what value do you see realtors providing w/r/t appraisals?
GFischer|8 years ago
Traditional appraisers might be better in certain markets or conditions though (probably Zillow and Redfin are more generic).
I've worked on homeowners insurance and I've seen wildly differing appraisals.
kelukelugames|8 years ago