There’s been some news recently about the online advertising site Zoocasa releasing a Zillow-like online real estate value calculator for Canadian real estate. To accomplish this, Zoocasa went and bought access to Brookfield’s Centra system. They do a lot of appraisals, primarily in eastern Canada, and I’ve heard they gave Zoocasa access to 4-5 million records. That’s not a bad snapshot on first glance.
However, I’ve always said that appraisals are but one opinion of the value of a piece of real estate. Even within an appraisal they use 2-3 different ways of calculating values with differing results. I’ve also seen appraisals of the same property in the same condition differ by 10-15%.
Don has a great quote in there. Don’t fall in love with a number. That’s always good advice for sellers. The value of your property is what a buyer and seller can agree on.
On to the data!
To do this quick test I pulled the last 10 Edmonton single family home sales from the MLS®. Because of delays in various offices enterting the data the sold dates are between October 28, 2011 and November 2, 2011 (today). Prices varied between $200,000 and $435,000. I placed no limits on the data except for being a single family home, so there’s two duplexes in the mix as well. One property (#3) didn’t have a lot size available because tax asessment data wasn’t available yet. Zoocasa wants you to:
- enter the address
- select from a limited number of property types
- number of bedrooms
- number of bathrooms
- living area
- lot size
- year built
- On average the Zoopraisal is 2% ($8,300) higher than the sold price
- 6 properties zoo-priced higher than sold, 4 priced lower
- In once case (#7) the Zoopraisal under-priced the property by $202,571 or 42% of the actual sold price
- Of the under-appraised properties, 3 of the 4 were off by >10% (i.e. when it’s wrong it’s really wrong)
- Of the over-appraised properties most were overvalued by $20-30,000
There’s no doubt it’s an interesting tool with limited data and it’s still only one tool. As a REALTOR® I’m still a little concerned that people will start focusing on a number that’s been created using faulty or limited data, making my job and the lives of buyer and seller alike much more stressful. That said, having another tool is a good thing for the future of the market.
If you want a more accurate value, give me a shout for a CMA.