What's My Home Worth?

Say "goodbye" to appraisers -- and possibly real estate agents. At least that's the promise of Zillow.com, launched Wednesday, which is headed by the founder of Internet travel company Expedia.

Zillow allows users to get a better estimate of what their house might fetch if sold, as well as others in their neighborhood and around the country (only US now).
Founder and CEO Richard Barton says new tools like the ones being offered by his company are going to make real estate agents less important, and quite possibly lower the fees homebuyers and sellers pay. "Realtors currently sit at the middle of the transaction," said Barton. "I think in the future they will sit more on the outside offering specific services."

Some observers agree. William Apgar, a senior scholar at Harvard's Joint Center of Housing Studies, says the fortitude of real estate agent's commission-based pricing structure, stuck at 6 percent, has baffled him and other economists for a while. But he says new tools like the ones being offered by Zillow should put downward pressure on the fees agents and other real estate professionals can charge.
"As information becomes more and more available the value of the specialized assistance realtors give goes down," said Apgar.

How accurate are Zillow's Zestimates? It's hard to say, but Apgar says the sites valuation tool is model on programs used by banks and realtors for years. "These tools are getting good," says Apgar. "But valuations are tricky. A particular house can have defects or improvements not factored into computer models."

For that reason, Zillow allows users to tweak their Zestimates by adding in the value of a new kitchen or a finished basement. "Web valuation tools have been tried before, " says Brad Inman, publisher of Inman News, which track real estate technology. "But the features Zillow offers are more robust because users can interact with the information like never before."