Are Mortgage Evaluation tools accurate?

Jim Weiker wrote an excellent column on Sunday in my hometown paper The Columbus Dispatch titled “Value judgments”.  The article took a look at online home evaluations websites such as Cyberhomes, RealEstate.com, Zillow, and others and compared their estimates to the actual sales price of recently sold homes in the Columbus, OH area.

The article had some good research as they used 27 recently sold homes and came up with the following results:

“A Web site operated by Chase Bank was the most accurate of the sites examined. The site, http://www.mortgage.chase.com, offered the closest estimate 13 of the 27 times.”

“The least-accurate sites were Zillow and RealEstate.com, an arm of the home loan company LendingTree.”

While these websites can be helpful, they are not the end all, be all and should be used with caution:

“‘It’s a good place to start if you’re trying to figure out the value of your home,’ said spokeswoman Mary Kay Bean. ‘It’s not the same as having an appraiser come in and evaluate the home.'”

The sites don’t know the condition of the home or an owner’s eagerness to sell.
   
They tend to be more reliable in areas of similar new homes, which offer plenty of comparisons, but less trustworthy in old neighborhoods or rural areas where one-of-a-kind homes are more common.

This was a fun article to read as I try and keep an estimate of our homes value each month in our net worth updates.  I have written before that I am constantly trying to find the best way to determine its value and have used these online estimates often.  However there can be big swings from month to month and I have often questioned the estimates given each month and I am not the only who is experiencing it.  Jonathan over at mymoneyblog.com had a great post a few months back asking if internet home valuation tools are worth it.

Like the article states, these sites can be good place to start to get a rough estimate of a homes value, but there are many factors in determining a home’s value and ultimately the best way to get a solid estimate is to get an appraisal done.  Personally I just use these sites as a rough estimate to see the estimated value on my personal residence.  When we start looking for a house in the next year or so I will not be using these sites as a guide in determining what house are for sale below market value or how much to make an initial bid on. 

In the net few days I am going to do a group comparison using all the different sites and see how close I come to the $95,000 that is currently on our balance sheet.  It should be an interesting experiment!

Does anybody else know of any other good home evaluation websites not listed in the article or had any similar experiences using their evaluations?