LETTERS TO THE EDITOR

Banks don't lend on online home value estimates

Re: 'New home-valuation site rivals Zillow' (March 30)

Dear Editor:

I cannot believe the stupidity of seeing more home valuation tools come online in the wake of Zillow's big flop.

Exercise: Take the Zillow Zestimate or take the new one from ABC to your banker. Do they lend money on this? No they don't. This is the point. Banks and lending firms do not lend on paper valuations generated by these sites.

The bank or lender sends out a human body to have your home appraised.

They use their own software combined with thousands of hours of experience to draw on many home valuation models. This is the only accepted form of appraisals and this is the only way banks and lending firms are going to lend money for a home.

I attended a meeting the other day with more than 50 brokers and some 500 homeowners. About 20 people stood up and asked about their inaccurate Zestimates of their home values. We had three banks there telling people why the Zestimates are figured wrong and why their homes are not worth the extra 30 percent that the Web site estimated.

Depression quickly settled in because some of the them clearly wanted to cash out some equity that they didn't really have in their homes.

So while Zillow may be luring in homeowners like kids into a candy store, the fact is the information they are providing the general public is actually a disservice. It builds up hope and anticipation in the homeowner and then Zillow leaves it up to us real estate professionals to pop their bubbles of inflated home valuations.

Bart Wilson
Voyager 360
Santa Fe, N.M.