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Why do people rely on websites to tell them how much a house is worth? Appraisals are not that expensive!?

I am a real estate appraiser. Why would a buyer/seller rely on a website to tell them how much a house is worth? This seems like a ridiculous concept! People are willing to pay HUNDREDS of THOUSANDS of dollars for houses, YET they will not pay a few hundred for an appraisal to make certain that the home is even woth it! When someone buys expensive jewelry, they get and/or see an appraisal, yet people are buying and selling houses based on websites- unreal. I truly think that our country is in a recession because of this type of mentality in America. People think that their "educating" themselves on websites like Zillow. They should be educating themselves on what appraisers have experience in their real estate market so that they can get an accurate appraised value!

Public Comments

1. Well I don't think people really rely on the websites to tell them the value, I think it's really used as a tool to help them estimate the value. Sellers typically have their realtor do a comp. search to come up with the market value, thus how they come up with the sales price. The majority of the time it's not the buyers choice - the lender requires them to get an apprisal done to validate the value, always have and probably always will. I do home loans and the only time we don't require appraisals is if the borrower has more than sufficient equity based on assessed value. Example, I had a borrower refinance his first mortgage for $90,000 and his assessed value was $323,000 - so we, the lender weren't going to require it. The perceived risk is extremely low, and in most cases in my local market appraised values come in higher than the assessed probably 95%+ of the time. I personally use Zillow as a tool only, not for a true basis of establishing value. Sometimes it helps me to determine if the loan is even plausible. I don't want to waste my members hard earned cash to pay $425 for an appraisal, to already have a good idea it's going to come in low, and then we can't do a loan for them.
2. Because some of us are just curious. We have no intention of selling our house, refinancing or making any changes. So it's not worth it to spend a couple of hundred bucks to hire an appraiser. As you know, when you purchase a house - the lender hires an appraiser and you pay for it in your closing costs. I don't think lenders accept Zillow as a substitute for an appraisal.