By Kate Merrihew, Director of Education and Marketing
I recently completed a home renovation. By completed I mean, as I type this article, there are 3 gentlemen in my home working on a detailed “punch list” of various oddities found while living in a “completed” renovation. Side note, if anyone ever had a pocket door that functioned 100% of time, I’d like to meet them.
My point is not to commiserate on home renovation timelines or missteps but to talk for just a moment about why we are a people-driven business and how people are fallible.
This photo was sent to me from one of our team members. This is an interesting use of a blender. I am relatively certain that even MacGyver is rolling his eyes. As appraisers, we come across some weird stuff at inspection appointments. We use all of our senses to try to get a feel for the buyer’s experience and sometimes, our senses are terrified.
Many have learned by now to distrust the reliability of a Zestimate. Zillow does not take into consideration the condition of the property and we already know that this is why it doesn’t work. What if the property condition photos told a different story than the actual home? We have all seen that before. MLS makes the property look pristine but surprise, there’s a blender connecting the pipes in the basement. Who would notice this? A person.
Online data creating a solid look at property valuation poses many problems but here’s one you may not have considered. The quirks.
If a photo of the subject’s basement only showed the walls and ceiling, you might miss something like this.
This was from an appraisal appointment where the paper towel rolls were being used to “fix” a leak. I hope they were Bounty.
While sites like Zillow and Redfin do not share their algorithms or how that information is weighted, we can safely presume that their estimates are based on available public information such as off-market conditions, searchable home characteristics and length of time on market. This tells us that it is truly only accurate for cookie-cutter homes, much like the cost approach in appraisal is most accurate in new construction. Replacement cost can be easily determined if all of the pieces were just purchased.
Knowing the home’s entire story and where each brick came from is not common. Once 1 owner has lived in it, the home can take on a life of its own. There is no algorithm to determine the bumps and bruises or paper towel situations that it has encountered. Appraisers must employ our experiences and knowledge to determine what we are seeing and how the market would react.
Yes, these examples are extreme but hopefully the reader will understand that they were used to demonstrate that people do ridiculous things. The only fair source of objectivity is another person, not a computer program. If valuation is our business, and to form an opinion of value we must place ourselves in the shoes of the typical buyer, I’m hoping that the valuation shoes are worn by an actual human.
**One of our Team Members found the following note on the vapor barrier in the crawl space when she appraised a property last week. Thanks kind humans, we see you!
These photos are the property of D.S.Murphy and Assoc. and should not be copied or used for other purposes.