In this uncertain real estate market, potential buyers are scouting for dipping prices. Potential sellers, meanwhile, are hoping their property values haven't slipped below the water line of what they paid before the real estate tide washed in.
What they all want is information. And several websites now analyze tax values and comparable sales data to come up with property value estimates of homes nationwide.
The Globe tested four online services - Zillow.com, Domania.com, HouseValues.com, and Realestateabc.com - by having them analyze the same 1,600-square-foot condo in Boston. We also anonymously hired an appraiser to visit the home and give his opinion.
What we found on the Web was a rosy-colored view of the real estate market. But as the town of Belmont's property tax assessor Dick Simmons Jr. said, "This is not the time to be optimistic."
The condo used to test the services was purchased for $329,500 less than a year ago and its tax value is listed as $353,300. It is not currently on the market.
The four online services estimated values ranging from $305,700 to $417,200, with the bulk of the values between $350,000 and $370,000.
The appraiser gave a more precise and pragmatic estimate: $332,000, just above the last sales price. Three realtors who were independently consulted and saw the home also estimated its market value at $325,000 to $345,000. So the Internet services seemed too high to be realistic.
"They're just crunching numbers without the benefit of seeing if the kitchen has been remodeled," said Stephen Sousa, executive vice president of the nonprofit Massachusetts Board of Real Estate Appraisers.
Some of the online sites also had inaccurate information in their files - a brick exterior instead of vinyl, one bathroom, not two. Such errors can throw off an estimate considerably.
Timothy Warren, chief executive officer of the real estate tracking firm Warren Group, advises consumers to consider any errors as red flags on the site's estimates. He also recommends using a local property that recently sold to test the accuracy of the online services.
But the sites can still be helpful, especially for someone starting the process. And they cost significantly less than the $300 or more to hire an appraiser, with some offering free estimates or charging $29.95 for each report.
Even some of the online companies themselves urge consumers to use their sites as a starting point only, then consult with a professional real estate agent or certified appraiser. "You truly need to have someone who knows the neighborhood, on a block by block basis," said Allison Vail, a spokeswoman for Domania.com.
With that in mind, we chose Zillow.com as our favorite because of its many features and easy-to-use format. However, it did give the highest estimate, or Zestimate in their lingo. So we recommend it as a place to start but nothing more. Hire a professional appraiser or consult with a real estate agent if you decide to move forward.
And as even Zillow.com spokeswoman Amy Bohutinsky acknowledges, no one can predict exactly how much a home could be worth. "Ultimately, what the home is worth is what it sells for," she said.
Pros: The Massachusetts Board of Real Estate Appraisers' website referred us to a local appraiser, then he responded promptly and was able to visit the house within 24 hours. The final 15-page report took a few days, but included photographs, a floor plan, and detailed comparisons with other local homes sold within the past few months.
Cons: The cost is high unless one is seriously considering selling, refinancing, or pulling equity from the home.
The final word: Hiring a certified appraiser is the best way to get a solid idea of a property's worth other than putting it on the market. But many serious sellers or buyers can rely on a real estate agent to guide them instead of paying the fee.
Estimate: $372,500 (they also give a range of $305,700 to $417,200)
Pros: The most user-friendly of the sites, Zillow.com shows how the home tracked over time and compares it with others in the area, the city, or beyond. It includes aerial maps, plus public information such as taxes and recent sales and more than 40 comparable home sales. It also allows owners to add a "Make Me Move" price to attract potential buyers. And it updates its pricing regularly, increasing its estimate on the unit tested by $6,500 within a month.
Cons: The site initially had inaccurate information about bathrooms, listing 1.5, not 2, and also wrongly said the home was brick. But the site allows updates and it changed its estimate of the home's worth by about $1,000 within about 24 hours of the updates. It also had the highest estimate above the appraiser's estimate.
The final word: With its clear layout and tools, it's a helpful site for researching multiple homes or neighborhoods, but its estimates ran high. The company acknowledges that its accuracy varies depending on the location, so consider using a second source in addition to Zillow.com for the Boston market.
Cost: $29.95 for a report without an agent making contact; free with an agent's call.
Pros: The $29.95 version took just minutes for the site to compile and still included charts and information on 15 comparable homes that had been sold recently. The estimate closely matches the assessed tax value from the city of Boston.
Cons: The site initially struggled to understand the address.
The final word: It offered a helpful report available at a small cost for a single home, but the price tag would add up if a consumer wanted information about multiple properties.
Pros: The report included 30 comparable sales on a map.
Cons: None of the comparable sales was from 2008 and some dated as far back to 2005, when the real estate market was markedly different. It also didn't list the sales price from when it last sold and inaccurately listed only one bathroom, not two, but didn't allow for the user to change the information. It also was picky about how to enter the address.
The final word: A less flexible site than some of the other options.
Estimate: Range of $350,000 to $370,000
Cost: Free but a real estate agent contacts you.
Pros: The site gave a quick e-mail response to our query.
Cons: After our initial contact with the real estate agent assigned to us, he did not get back to us for more than a month and then didn't return the report when promised. When it arrived, it included a big typo saying the home was worth as little as $35,000. When contacted, the agent acknowledged he had missed a zero. A company spokesman noted our experience was "contrary to the best practices we promote and clearly below our service level expectation."
The final word: Our experience with the agent assigned to us may not be indicative of the overall HouseValues.com service, but such inconsistent service was not professional. If you want a local realtor's perspective, seek a respected agent by getting recommendations from friends and colleagues then ask for a value estimate.