Housing search engines are hard to avoid among homebuyers. Most people, whether they’re serious about buying or not, have spent some time browsing and bookmarking dream homes on these sites. And most homeowners are well-acquainted with the current value of their home, thanks to the handy housing estimate tools.
Housing search engines are everywhere. Four out of five homes in the U.S. have been viewed on the major housing search sites. Suffice it to say, these are sources from which the majority of homeowners are gathering their homebuying information. But are they accurate?
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What realtors think about housing search engines
Most buyers are big fans of house search engines because they’re user-friendly and convenient. On the other side of the coin, we have the real estate professionals who see some cracks in the façade.
“Beware the online housing estimate,” says Megan Zavieh, attorney-at-law and licensed real estate broker in Georgia and California. Zavieh explains that most online housing estimates are computed through an algorithm. It’s not a substitute for an appraisal or a proper human-done comparative market analysis.
“Housing estimates on search sites can be very reasonable estimates of a home’s value, but they can also be way off. I’ve spoken to people who were completely convinced of a value because of the online housing estimate when the estimate was extremely far off of the real value,” Zavieh says.
The upside of these housing search engines is that they enable the user to participate in the home searching process, Tim McMullen, a real estate professional in downtown San Francisco at Coldwell Banker Global Luxury, explains.
These sites have done an amazing job at removing the gatekeepers to the industry; however, that pesky online housing estimate problem remains.
McMullen agrees that drawbacks come in the search engine’s valuation process for homes — particularly when a seller isn’t familiar with how housing search engines crunch their data for a home’s value. “Data-mining engines compile relevant square footage, number of beds and baths, neighborhood factors, location, and much more and compress it all into a generalized dollar amount,” McMullen says.
So, if the home next door to yours is also a three-bedroom, two-bath on a 5,000-square-foot lot and looks almost identical from pictures, a housing search engine’s calculator will consider these homes “similar” and price them accordingly. Unfortunately, McMullen says, the data hasn’t been able to dig deep enough to compute the variability in each home.
To bridge this gap, one of two things must happen.
According to McMullen, users first need to be educated in the valuation process by housing search sites to minimize conflict in the industry. Alternately, McMullen says, the sites’ deep-search/machine-learning team needs to find a way to pull all relevant information on property-renovation grants, permits, work completed documentation from contractors, etc., and tie that information into a property coupled with relevant market information. This will yield a more accurate price for an individual home.
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5 more housing search engine insights from industry professionals
We tackled the elephant in the room — the notorious inaccuracy of the online housing estimate — but what else is it about housing search sites that is so off-putting?
Consider these potential pitfalls, gleaned from the professionals who interact with housing search engines on a daily basis:
1. Not all houses are listed on housing search engines.
“Some agents, offices, and MLS opt out of data-sharing with online search engines for houses,” Mark Ferguson, real estate agent, real estate investor, author, and creator of InvestFourMore.com, says. Meaning, you could miss out on the perfect home — just because you don’t know it’s there.
2. Data can be outdated.
It can take days for a new listing to show up on a home search site, Ferguson explains. This means it could be under contract by the time someone sees it.
Tim Hamby, Director of Corporate Communications at HomeASAP, which offers the Search Alliance™ national home search network, a portal-alternative for real estate agents and their prospects, says this unreliable data quality is because a housing search engine may not access all of its data directly from the MLS, like an MLS member. “While many housing search engines have historically received listings data directly from many MLS markets, this has supplemented (if not duplicated and confused) much of their other data, which has primarily been derived from ‘syndicated data.’ Syndicated data is comprised of listings where the agent/broker/seller opts in to display their data (which many refuse to do).” Not only are consumers not able to see all available listings, Hamby says, but they are also presented with data that was slower to show up on a search website and that is more likely to contain errors.
3. Many homes on housing search sites are unavailable.
Housing search engines do not update their listings as often as the MLS does. Ferguson reminds us, “Many houses that are listed as for sale on these sites are actually under contract already.”
4. Housing search engine advertising can be confusing at best, and at worst, misleading.
This may be a result of housing search engines’ business model, which sells ads to agents. “There’s so much ad clutter (and so many agents presented) that it becomes difficult for buyers to even ascertain who the listing agent is!” Hamby says.
5. Housing search sites can be problematic for realtors.
It’s not just the buyers who may be befuddled by the delays and potential inaccuracies. Based on his experience working with agents, Hamby shares that realtors have struggled using home search sites to reach clients. Housing search engines may provide low-quality leads, working as the middleman. And realtors too have been hindered by inaccurate online housing estimates when working with sellers. Erroneous housing estimates like this can damage realtor relationships and could result in the loss of a client.
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Where can you get accurate home data and prices?
The only way to get complete and accurate data on homes available and accurate sold home prices is to use a site or mobile app that connects directly to MLS (Multiple Listings Service). Licensed realtors are the key to accurate home lists and prices.
We recommend three trustworthy resources for accurate listings:
1. Realtor.com.
Realtor.com has a licensing agreement with the National Association of Realtors and their MLS associations. As a result, the site has live, accurate data. (To note, Realtor.com is still optional for brokers. The site has more listings than the popular housing search engines, but not all. Realtor.com hovers around 89 percent nationally.)
2. Your local MLS site.
Many city MLSs support a site that is free to the public. H.A.R. in Texas is one example. You can also contact your realtor for a link to download or view active, local MLS sites.
3. LoanFly.
You can use our free app to quickly get prequalified for a home loan and to search Home Scouting®, a nationwide real estate search service from HBM2. Home Scouting has active MLS feeds in 98 percent of all markets, and since every listing from every agent is there, it’s always up-to-date.
No one’s saying you have to give up your online home browsing addiction anytime soon. But consider the margin of error as you search. Once you find a property you love, send it to your realtor so they can give you their professional feedback. Better yet, use one of the reliable sources above to avoid missing out on great homes as they hit the market.
Inaccuracy in a home search can not only be frustrating, it can be a major setback. “One complaint that I hear about housing search engines is that they continue to market a home as an active listing when it might have already sold and closed,” Michael Landis, Regional HBM Director at Cornerstone Home Lending, says. “No one wants to fall in love with a home that someone else already fell in love with, bought, closed, and moved into!”
Trust us when we say that getting the most accurate information — in your home search and in your home loan — can reduce much of the stress people associate with buying a house.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.