Category : Home Financing

1233054_10151641582021961_1311111847_oHere’s an easy-to-understand description of “mortgage rates and points”.
The interest rate determines the monthly interest payments over the lifetime of the loan. A “point” or “discount point” is equivalent to 1% of the loan amount and usually reduces or “discounts” the loan rate by an eighth of a percentage point.
For Example:
You want to get a loan for $100,000 to buy a home. Each “point” would cost you 1% of $100,000 or $1,000 but would reduce your loan’s interest rate by .125%. The lender might offer you an 8.0% loan with zero points, a 7.875% loan with one point, or a 7.75% loan with 2 points.
Points, like the down payment, are paid at closing. In some cases, lenders will allow borrowers to finance the points over the term of the loan. Lenders sometimes use points to make their interest rates appear lower. Be aware that lower interest rate offered by a lender may translate into higher points requirements.
For consistently low rates and points, contact eastmortgage!


Many of you are seeing it in the field: Low inventory, houses flying off the market and a groundswell of demand from buyers. As a result, home prices are steadily increasing.

Combine all those factors with signs of strength in the economy, and you have a recipe for another market change: higher mortgage rates.

The average for a 30-year fixed-rate mortgage jumped to 4.29 percent in early July—nearly a whole percentage point above where it was in early May, according to Freddie Mac.

While some industry watchers predict that rising rates could stall the positive momentum in housing’s recovery, I tend to agree with the school of thought that says the rebound will continue despite upward ticks over time.

Rates are still historically low compared to what they were before the recession hit, and prices are still affordable in many areas.

Will some home-buyers see a decrease in their buying power if rates climb too far, particularly young, first-timers or low-income families? Unfortunately, yes.

But it won’t affect all buyers.

Recent data reported by the MBA notes that although we’re seeing slight dips in overall mortgage applications as rates increase, conventional home loan applications are picking up by a few percentage points.

This indicates two things: 1) people with steady incomes and employment, a sizeable down payment, and strong credit are finally coming off the sidelines to buy before rates go up further; and 2) many of these borrowers are more than likely move-up or repeat buyers who saw the equity return to their homes and were able to finally sell so they could make their next move.

Recent data reported by the MBA notes that although we’re seeing slight dips in overall mortgage applications as rates increase, conventional home loan applications are picking up by a few percentage points.

Perhaps you know of potential buyers who have been waiting for the bottom of the market. If what we’re seeing is any indication, the bottom has come and gone. We’re in a steady recovery, and now’s the time to encourage those would-be buyers to explore their options. It’s worth noting, though, that home prices and mortgage rates could go up more as demand continues to outpace existing supply and new construction.

These recent market shifts are an opportunity for you to shine a spotlight on your professional expertise, as well as employ creative marketing strategies to communicate these trends to your entire database of contacts. Use local and national statistics to show them what’s happening in real estate.

If you know of potential buyers who’ve been waiting it out, tell them what’s going on in frank terms, then connect them with a trusted lender who will show them what their monthly payment might look like at the current mortgage rate for a property within their price, as well as a comparison of what it might be if rates reach 5 percent or more. Seeing the numbers in black and white could be the impetus indecisive buyers need to make their big move.

It’s natural for some people to panic a little when they see home prices and mortgage rates make big jumps, but it’s an inevitable part of the crests and troughs of a housing cycle. Remind home-buyers and sellers of your value by giving them the facts without the frills. With the right approach, you’ll help get those buyers and sellers off the sidelines and back into the game.

For more information regarding mortgage rates or your housing needs contact us at


What happens if you go through a tough financial period and you find yourself behind on your mortgage payments for your home?

If you are missing mortgage payments and are having difficulty paying, this can become a serious problem. Even just one missed payment can be difficult to catch up on, and if you are in this situation it is important to get help right away.

Contact Your Lender

The first step in this circumstance should be to get in touch with your mortgage lender to explain the situation. Simply leaving things alone and not explaining why you have missed a payment will just make things worse.

When people are struggling financially, they avoid calling their creditors for as long as they can. This is usually the wrong strategy to have if you want to make sure that you keep your home.

When you speak to the lender, you can explain why your payment is overdue. For example, perhaps you were laid off from your job or you have been sick and unable to work. If you have a good payment history and you are the one to initiate contact, the lender may be more likely to consider options for you to repay the mortgage.

Consider All Of Your Options

Is there a relative or a friend who could lend you enough money to pay off your missed mortgage payment? Could borrow from your insurance policy? Is there a way you can sell something that you are not using or cut back on other expenses?

Perhaps you could work a part time job on the side to earn more money. There are a number of ways that you could come up with the extra cash and make the mortgage payment.

However, be careful with payday loan companies or other short term lenders, as they may charge extremely high interest that can make it even more difficult to get out of debt later.

Loan Modification

In some circumstances, you might be able to arrange with your loan servicer to permanently change one or more of the terms of your mortgage contract so that your mortgage payments will be more manageable for you.

This could include reducing your interest rate, adding the missed payments to the loan balance or extending the term of the loan. A loan modification can be a good idea if you are facing a reduction in your income that will last for an extended period.

If you are struggling financially and you have missed a mortgage payment, don’t panic. Instead, follow these steps to make sure that you deal with the situation well and get back on track.

To find out more about getting a mortgage on your home, contact your trusted mortgage professional today.


Cole Taylor Mortgage has teamed up with RE/MAX Plus for an Open House Blitz weekend set to take place Sunday, June 9th at various times.

The focus will be to highlight the properties located in the USDA eligible areas and the potential buyers who can qualify for this program. This is an exciting opportunity to increase awareness to listings and the number of qualified buyers. To view a map of USDA eligible areas click here.

Cole Taylor will have information on hand at each of these listings for the USDA guidelines and qualifications. Please take a moment to review the following homes that will be open and the times you may visit them on Sunday, June 9th:

MLS Address Town Zip  Price Open Time
R204324 18 Evergreen Dr Batavia 14020  $  209,900 Advertizing Only
R218166 78 Forest Meadow Trl Ogden 14624  $  171,500 2-4PM
R220384 6349 Route 262 Byron 14422  $  184,900 12-2PM
R216583 841 Stones Cir Caledonia 14423  $  168,500 Advertizing Only
R206580  669 State Route 31 Macedon 14502  $  189,900 1-3PM
R203645 1113 Main St Mumford 14511  $  114,900 1-3PM
R207024 524 Gillett Rd Ogden 14559  $  114,900 1-3PM
R218530 28 Walnut Hill Dr Parma 14559  $  219,900 1-3PM
R215980 3218 Goosen Rd Marion 14505  $  254,900 1-3PM
R216127 7753 Victor Mendon Rd Victor 14564  $  289,900 1-3PM
R212573 943 Johnson Rd Palmyra 14522  $    89,900 1-3PM
R217831 3266 W Walworth Rd Macedon 14502  $  229,900 1-3PM
R217312 417 Burch Farm Dr Clarkson 14420  $  119,900 1-3PM


4227 Heather Drive Spur Marion 14505  $    94,900 1-3PM
R214753 40 Munger St Bergen 14416  $  109,900 1-3PM
R223072 260 Genesee St Avon 14414  $  159,900 1-3PM
R201130 38 James Moore Circle Parma 14468  $  229,900 1-4PM
R215924 70 Fairview Wheatland 14546  $  115,000 12-2PM
R208691 3267 LeRoy Rd LeRoy 14482  $  249,900 1-3PM
R221725 114 Heather Lane Scottsville 14546  $  134,900 12:30-4PM
R221531 465 Lake Road East Frk Hamlin 14464  $  190,000 1-3PM
R222164 972 Roosevelt Highway Hilton 14468  $  189,900 12-2PM
R222178 28 short hills Drive Hilton 14468  $  119,900 1-3PM
R204551 339 Franlee Ln Victor 14564  $  365,000 1-3PM
R220222 4990 Main St Livonia 14466  $  105,000 1-3PM



Get Your Free Credit Report

Normally, the credit reporting agencies (CRAs) may charge you a fee for a copy of your credit report. However, an amendment to the Fair Credit Reporting Act requires each of the CRAs to provide you with a free copy of your credit report once every 12 months.

Get Your Free Credit Report
To obtain a free copy of your credit report:

  • Visit, or
  • Request your free credit report by phone by calling 1.877.322.8228. Deaf and hard of hearing consumers can access the TTY service by calling 711 and referring the Relay Operator to 1.800.821.7232.

To request your free credit report by mail, please complete the Annual Credit Report Request Form(PDF document) and mail it to:

Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281

Answers to frequently asked questions about are also available.

Other Times You Are Eligible for a Free Credit Report
You may also request a free copy of your credit report in some other circumstances. Visit website about access to free credit reports from the Federal Trade Commission (FTC) for this information. Or, call the FTC and speak to a representative for assistance. You may call them at 1.877.FTC.HELP (1.877.382.4357) or 1.202.326.2222. TTY users may call 1.866.653.4261.

Changes to Advertising for “Free Credit Reports”
As of April 2, 2010, advertising for free credit reports require new disclosures to help consumers avoid confusing free offers– which often require consumers to spend money on credit monitoring or other products or services– with the free credit reports available at For more information, please visit the FTC news release concerning the amendment to the Free Credit Reports Rule.

Filing a Complaint
If any of the CRAs denies your request for a free credit report:

  • Contact that CRA directly to try and resolve the issue. The CRA should inform you of the reason they denied the request and explain what to do next. Often, you will only need to provide information that was missing or incorrect on your application for a free credit report.
  • If you are unable to resolve the dispute with the CRA, file a complaint with the FTC by calling 1.877.FTC.HELP (1.877.382.4357) or 1.202.326.2222. TTY users may call 1.866.653.4261.

Additional Resources:

Please note: To view and print PDF documents, you must use the Adobe Reader software, which is available for download without charge.

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

What did you neglect to do for your real estate in 2011? What will that cost you in 2012?

As 2011 draws to a close, what opportunities to accelerate appreciation have you overlooked?

  • Which simple value preservers have you ignored?
  • How many costs of ownership have you missed opportunities to reduce?
  • Which value builders have you ignored?
  • Which advantages of ownership have you neglected?

Is your home a “thing” to look after, or a financial partner in your future? Either way there is maintenance and property management to be done on many levels every season, every year. Why not make sure your care-taking activities consciously also build value?

How many of the following value-making strategies did you apply to your real estate this year to achieve cost saving and equity building?

  • The last leaves have fallen…probably into your eaves troughs. Did you have them cleaned out once the trees were barer? Depending on how many trees surround your home, you may need to clean the eaves troughs two or three times a year to keep rain water and melting snow flowing off your roof and away from outer walls and the basement of your home. Reduce the labour and cost of cleaning by installing screens across gutters that block debris accumulation. Failure to act will cause damage to the gutters, roof damage, damaging interior leaks, and a wet basement. Rotting leaf litter can also attract animals and end up smelling bad. The unsightly damage down-values curb appeal, too. What will all that cost in 2012, or later, just because eaves troughs are ignored now?
  • Snow is part of winter…causing ice dams on your roof which damage the roof and inside, too. If there is not sufficient insulation and ventilation in the attic to keep the attic and roof cold, escaping warm air will start a chain reaction that means unnecessary expense and a prematurely-aged roof. Interior heat loss (which is also financial loss) melts snow on the roof and the melt water runs down to re-freeze when it hits snow or ice in the gutters. This repeated action causes a dam of ice which pools water, so it seeps up under shingles and into the home to damage ceilings, walls, and furnishings. Eventually, rot sets in and you’ve got structural problems. Are you sure you have enough insulation in the attic and great ventilation? If insulation’s been there a while, it may have been damaged by contractors or animals. Have roof vents and exhaust vents from fans been properly installed, or are they piping warm moist air into the attic to grow mould? Government energy grants may shoulder some of the cost, but what will it cost if you ignore the threat? For more on ice dams, causes, and solutions: Click Here
  • Winter is garden planning time…How did you improve curb appeal this summer? Many homes don’t sell because buyers are not won at the street. If they won’t go in, they won’t buy. Create the most interesting, low-maintenance garden on the block and you’ll have a house that wins attention even before you decide to sell. Make that a “green” low-water landscape and you’ll save time and money in the process.
  • Spring is property tax time…Did you contest your assessment and have the assessed value of your property lowered? Keep pushing that value down and you’ll keep property taxes in check as much as possible. The more loonies you keep in your pocket, the richer you are.
  • Summer is sale time…furnace sales, that is. Make major purchases in the off season and you’ll get a great price and the full attention of the best installers. In peak months, you’re overpaying for overworked contractors who are too rushed to do a thorough job, just show up. Government grants and manufacturer specials for replacement of furnaces and heat/cooling systems are common, particularly at the beginning and end of season. Updating systems adds resale value and saves on monthly costs.
  • Holiday season is payback time…Shop locally and you enhance the value of your neighbourhood, and stave off big-box and chain stores which homogenize areas. Buy your gifts from local artist studios and shops and you’ll have unique presents that keep value in the neighbourhood. Too often the very shops and small food stores that first draw home buyers to an area are ignored once they’re residents in favour of cheap, high-volume national and international chains. Shop in 2011 and start 2012 by revisiting local shops and businesses so their year starts strong, and you’ll keep future home buyers envious of those who live in your neighborhood.
  • Action beats “if only I’d”…If you believe 2012 will bring a slow down or stall to your neighbourhood real estate market, did you seriously consider the advantage of selling in the stronger 2011 market? You could rent for a while and then buy in the softer real estate market. Your home is only worth what someone will pay for it, not should pay in your opinion. Owners who list with prices from the last strong market, lose valuable credibility with buyers and, therefore, may net less in a sale. Investing time to crunch numbers and seriously consider all your options each year, is the best way to be sure you’re making the most of your equity. Aim to never put yourself in an “if only I’d” situation, and you’ll know real estate is your financial partner in building the future of your choice.Many real estate owners count on passive appreciation and expect their real estate to automatically increase in value. Waves of real estate booms driven by boomers moving from first house to megahome to recreational property to deluxe condo, through various stages of life, have driven real estate values to dizzying heights and made significant annual price increases seem the norm. What will drive value increases in the future? How much can owners count on passive appreciation to build future value?

    Real estate will increase in value under some circumstances, but not automatic, not for every property. Sometimes values decline. In strong real estate markets and preferred locations, property values can steadily increase, but not equally for all properties in every neighbourhood. When markets slow, only preferred locations may keep increasing in value, or at least hold their own. Unless owners step in and deliberately preserve equity, maintain equity, and build value by treating their real estate as a financial partner in their future, many owners may not see as dramatic appreciation in the future as they have experienced in past decades.

    The future starts now for real estate. By the time future patterns become present realities, it is too late to make the most of those real esate opportunities. Look ahead with your real estate. Build value as you go to retain the flexibility to be ready to act on opportunity. Take full advantage of the investment you love to live in. Make 2012 the year you moved beyond being a caretaker.

Published: December 27, 2011

Use of this article without permission is a violation of federal copyright laws.

What with the millions of former homeowners sitting around twiddling their thumbs following foreclosure or a short sale, many of them might be wondering how soon they will be able to get back into the real estate business.

One article that recently caught our attention in the New York Times attempted to answer that question, coming to the conclusion that there are all kinds of conditions to consider following what it terms a “significant derogatory event”, i.e. foreclosure.

Wondering if you’ll ever be able to buy again? Courtesy of Opinion Maker

One thing that the New York Times noted was that those whose homes were foreclosed will most likely face a much more substantial wait than those who got out early with a short sale.

Fannie Mae and Freddie Mac stipulate that persons who had their homes foreclosed must wait a minimum of three years before being able to apply for credit with them again, while those who went for a short sale only need to wait two years. There can be extenuating circumstances however, and if borrowers are able to show how they were extremely unfortunate, and if they had a good financial track record in the past, they may be able to shorten the time they have to wait.

On the flip side however, those who cannot prove any misfortune may well face an even longer wait than the minimum three years – with some being forced to wait as many as seven years, or four years if they went bankrupt.

Those who take out a loan that is covered by the Federal Housing Administration, and have a perfect credit record after borrowing the money, will also be eligible to buy again three years after a foreclosure, or just two years following a declaration of bankruptcy.

Avoid foreclosure through a short sale and you can get back on the property ladder more quickly, say Fannie Mae.

For those previous homeowners who were forced into a short sale, they will be able to secure a new FHA loan after three years, in most cases. As always, there are exceptions to this rule. The three year stipulation is supposed to be for borrowers who were defaulting on their homes at the time they initiated a short sale. For those borrowers who always managed to stay above water, that is, keep up with their payments, one year before they decided to short sale, they may actually be able to take out a new FHA loan right away.

The trick it seems, if you want to get back on the property ladder as soon as you can, is to steer clear of foreclosing, says Fannie Mae’s Andrew Wilson. “Avoiding foreclosure means you become eligible again in a much shorter time,” he told the New York Times.

If you would like to speak to a real estate professional regarding your current housing situation, please call us at (585) 279-8200.

SmartMoney Magazine: The calculations behind online estimates are adding confusion to an already tricky housing market.

Jason Gonsalves worked hard to turn his 6,500-square-foot stucco-and-stone home in the suburbs of Sacramento into the ultimate grown-up party pad. Inside are the game room, home theater and custom wine cellar. Outside, there’s the recently added piece de resistance — a wood-burning pizza oven, kegerator and searing station, all flanking an infinity-edge pool that overlooks the lapping waters of Folsom Lake. A spread like that doesn’t come cheap, of course, so when interest rates fell recently, Gonsalves, who runs a lobbying firm, looked into refinancing his $750,000 mortgage. That’s when he got some startling news — even as he was putting the finishing touches on his home, it had dropped more than $200,000 in value over a seven-month stretch.

Or at least, that’s what one popular real estate website told him. Another valued Gonsalves’s pad at a jaw-droppingly low $640,500. And these online estimates left him all the more confused when a real-life appraiser, assessing the house for the refi loan, pinned its value at $1.5 million. “I have no idea how those numbers could be so different,” Gonsalves says.

[Click here to check home loan rates in your area.]

Right or wrong, they’re the numbers millions of consumers are clamoring for. In a housing market that’s been mostly a cause for gloom, so-called home-valuation technology has become one of the few sources of excitement. After years of real estate pros holding all the informational cards in the home-sale game, Web-driven companies like Zillow, and are offering to reshuffle the deck. They’ve rolled out at-your-fingertips technology via laptop and smartphone to give shoppers and owners an estimate of what almost any home is worth. And people have flocked to the data in startling numbers: Together, four of the biggest websites that offer home-value estimates get 100 million visits a month, and one,, saw traffic jump 25 percent in the three months after it launched a value estimator in May. “Consumers used to use us for home buying and move on,” says Jason Doyle, vice president of “Now we can stay engaged with them.”

Real estate voyeurism aside, the stakes are high for many of the sites’ visitors. Homebuyers use the estimates to get a feel for what’s on the market and, later on, to figure out whether their bid will entice a seller to play ball. Vigilant homeowners like Gonsalves check their values to help decide whether it’s worth the hassle of refinancing, while others who are ready to sell use them to gauge if they’re priced right for the market. Real estate agents, meanwhile, say they’re increasingly resigned to spending more time answering questions — or arguing — about the estimates. “It’s an evolution for consumers,” says Gary Painter, director of research at the Lusk Center for Real Estate at the University of Southern California. Banks and other lenders are piggybacking on the trend as well, with some even showcasing the upstarts’ estimates on their own websites. While lenders say they don’t use the estimates to make final decisions about loans, they say Zillow in particular has become a go-to tool for their preliminary research on homes. “I use it every day,” says Zach Rohelier, a mortgage banker at LendingTree.

But for figures that carry such weight, critics say, the estimates can be far rougher than most consumers realize. Indeed, if the websites were dart throwers, they’d seldom hit the bull’s-eye, and they’d sometimes miss the board entirely: Valuations that are 20, 30 or even 50 percent higher or lower than a property’s eventual sale price are not uncommon. The estimates frequently change, too, for reasons that aren’t always easy for homeowners to discern. According to the companies themselves, some quotes have swung by hundreds of thousands of dollars in as little as a month as new data gets plugged into the algorithms the sites rely on. (Those algorithms also change, as happened this summer when Zillow made adjustments that affected all of the 100 million homes in its database.) And while the sites say it’s probably rare that individual homeowners (or real estate agents, for that matter) game the system, they do acknowledge that people can enter information that might push estimates higher. Put it all together, say pros, and you’ve got numbers that have become head-scratching legends in one community after another: a Hollywood Hills aerie losing 47 percent of its value in one month (with no earthquakes or mud slides to explain the drop); a century-old home in Louisville, Ky., that, according to local lore, served as the inspiration for Daisy’s home in The Great Gatsby, quadrupling in value over 30 days; and one townhouse in Brooklyn, N.Y., listed now for $5 million, valued at a whopping $31 million in the midst of the real estate crash — at least according to Zillow.

Zillow says the Brooklyn valuation was an error that it subsequently corrected. And make no mistake, all of the competitors go out of their way to make it clear their numbers are guesstimates, not gospel. “A Trulia estimate is just that — an estimate,” says a disclaimer on that site’s new home-value tool. Zillow deploys similar language and goes a step further, publishing precise numbers about how imprecise its estimates can be. And every major site urges home-price hunters to “always consult with a real estate agent or house appraisal specialist,” in the words of Indeed, these sites say they have strong relationships with the real estate business in general; they get a significant share of their revenue from the industry, in the form of advertising and subscriptions.

[Click here to buy or sell a home.]

But when the real estate version of Pandora’s box is opened, homeowners don’t necessarily pay attention to disclaimers. Consumers and pros alike say many Web surfers put enough faith in the estimates to sway the way they shop and sell. “I’m constantly explaining to clients that those numbers don’t come from a person,” says Mindy Chanaud, a real estate agent in Greenwich, Conn., who launched into what she calls her Zillow spiel when shown a Zestimate of one of her listings. Frank and Sue Parks, former owners of the Gatsby house in Louisville, watched as the site put a $331,000 value on the dwelling in May; by July it had climbed to $1.5 million. (Zillow says the lower estimate reflected errors in its statistical model.) The couple got some potential buyer referrals from the site, but they had to fend off a stream of lowball offers before they sold their place this fall. They’re convinced that the estimate roller coaster accounted for some of that. Says Sue, “It really affected our ability to move the place.”

For most of real estate history, of course, determining a home’s value has been an appraiser’s job. Appraisal involves gathering data on recently sold homes in the area and comparing them with the “subject property” on matters like size, condition and characteristics, before coming up with an estimate of the home’s worth. If the property has, say, a swimming pool, but most recently sold homes don’t, the appraiser might add a premium to the sale value. Still, the exercise involves as much art as science, as appraisers acknowledge. The more unique or luxurious a property, the harder it is to accurately value. “Imported marble and a view of the ocean are going to be more or less valuable depending on market conditions,” says Susan Allen, a vice president at CoreLogic, a data and analysis provider in California. And critics have accused a few appraisers of inflating the value of properties or rubber-stamping other people’s estimates to ensure that deals went through.

The response, beginning in the late 1980s, was the rise of the machines. Economists started developing automated valuation models, or AVMs; instead of having a person visit the property and crunch calculations, these computer models sync the math with data about comparable sales, square footage, number of bedrooms and the like, all in a matter of seconds. Rob Walker, a managing director at AVM purveyor Lender Processing Services, says the models sped up the approval process for second mortgages and home-equity loans; indeed, for years, the tools were mostly reserved for in-house nerds at lending banks. It wasn’t until 2006 that Zillow took them to the masses, with its Zestimate. The company runs data on more than 100 million homes through its own algorithms that recognize relationships between property characteristics, tax assessments and recent transactions. “Humans don’t make these decisions,” says Stan Humphries, chief economist at Zillow.

Scores like these have helped build successful business models for some companies — Seattle-based Zillow, for one, just raised $69 million in an initial public offering. And they’ve become weapons in the arsenal of consumers like Terence Avella, an attorney in Eastchester, N.Y. After he and his wife became enamored of a four-bedroom Victorian with an asking price of $650,000, Avella consulted Zillow, finding a much lower valuation: $510,000. He says the Zestimate reinforced his belief that the house would need extensive renovations — and he put up a lowball bid. By the time the process was over, Avella had settled on an offer of just $580,000 (though the negotiations later fell through). Indeed, in a market where listing prices often reflect hope more than reality, some agents and consumers say that online tools are a useful reality check. Simms Jenkins, an Atlanta marketing executive, says he’s recently relied on sites like these to both buy and sell homes. “I can’t imagine 25 years ago, when people would just go out and spend their entire Saturday looking at homes,” Jenkins says. “You don’t have to do that now.”

But what’s a godsend to Jenkins is an ongoing mystery to Mike Battaglia. Battaglia lives in a Frank Lloyd Wright inspired mansion in Louisville, on a historic street, across from a lush park. But his neighborhood is decidedly eclectic — homes like his sit near much smaller starter homes — making it a challenge, local appraisers and agents say, to figure out how much each home is worth. Among the online estimates, that difficulty plays out in real time. valued the manor at $761,700, but that figure dropped $85,000 in a month. Zillow pinned its worth at $1.1 million in December 2010, then posted no Zestimates at all for several months — only to peg its value at $327,000 in May, a 70 percent haircut. By fall, it was back up to $1 million.

Battaglia, a business consultant, says he knows the numbers are only estimates, but he still thinks that notion doesn’t register with people: “It’s the perception of value that affects people’s psychology.” Zillow says its wide range of estimates was a result of volatility in the local market.’s Doyle declined to comment specifically on Battaglia’s house, but says that a home in a neighborhood like his could definitely be vulnerable to inaccuracies. “If there’s a transaction next door and someone just gave away a house, it will throw off the model,” Doyle says.

Indeed, appraisers and real estate consultants say that those models veer off target with alarming frequency. Typically, data for valuation models come from two sources: records from tax assessors and listing data for recent sales. Middleman companies — the dominant ones are CoreLogic and Lender Processing Services — gather this data from more than 3,000 U.S. counties and license them out to the Web sites and other model-builders. Collection is itself a challenge, because not every county tracks properties the same way. In North Carolina’s high-tech Research Triangle, anyone can get data directly from the Wake County website, while in rural Wright County, Mo., tax rolls are available only on paper. The size of a home could be reported by square footage or by the size of each bedroom and bathroom, so data companies must “scrub” the data to make it uniform. Even then, the data isn’t always useful in the field, say real estate pros. County assessors often use AVMs in newer subdivisions where floor plans don’t vary much. But with custom homes or neighborhoods going through gentrification, the models can go haywire. “You cannot use a computer model in certain areas and expect the value to come out right,” says John May, the former assessor of Jefferson County, Ky.

Some properties’ data can be too tough a nut for any computer model to crack. On a quiet street in one of Brooklyn’s grander old neighborhoods stands the brownstone that, according to Zillow, was worth $31 million in 2007. “I don’t even know if there’s ever been a home in Brooklyn worth that much,” says a spokeswoman for The Corcoran Group, the agency that now lists the property on the market, for $5 million. Zillow declined to discuss why its earlier estimate was so high, but a look at the house’s records suggests one potential reason for the enormous spread: Although the address is a two-family townhouse, the current owners use the entire house, giving them square footage that’s off-the-charts big by New York City standards.

Public records are hardly the only problem. Automated models aren’t designed to account for the unique details that often make or break a deal — something their designers readily acknowledge. AVMs usually can’t capture data that determines the condition of a property, such as whether there’s been a ton of wear and tear. Is a home right next to the railroad tracks or a golf course or a landfill? AVMs can’t always answer those questions, say industry pros, though GPS technology is improving things on that score. Models also can’t decipher the motivations of a buyer or seller, says Leslie Sellers, a past president of The Appraisal Institute. A couple who’s going through a nasty divorce, for example, may have taken the first offer that came along just to unload the property. For all these reasons, says Lee Kennedy, managing director of AVMetrics, a firm that audits and tests industrial-grade AVMs, the models that banks use often add a “confidence score” to their value estimates, with a low score signaling that it’s best to send in a human appraiser.

Consumers, however, don’t get to see a confidence score; instead, they get disclaimers, some of which are eye-opening. Zillow surfers who read the “About Zestimates” page find out that the site’s overall median error rate — the amount the estimates vary from the actual fair value — is 8.5 percent, and that about one-fourth of the estimates wind up being at least 20 percent off the properties’ eventual sale price. In some places, the numbers are far more dramatic: Gibson County, home of the West Tennessee Strawberry Festival, has a 57 percent error rate; in Hamilton County, Ohio, where the Cincinnati Bengals play, it’s 82 percent. Site users are always one click away from this data, but agents say few homebuyers read it (on Zillow’s homepage, the font for the “About Zestimates” link is slightly smaller than the main home-data type — and quite a bit fainter).

The sites argue that, over time, edits and corrections will help them perfect their numbers — and many of the corrections will come from their customers. On, for example, anyone who knows certain specifics, like a homeowner’s surname and the year the home was last purchased, can edit the details to reflect, say, a sprawling two-bedroom addition. Zillow also allows site visitors to modify its property details, and in four years, it has accepted revisions on 25 million homes — perhaps the strongest testament to how seriously consumers take the estimates. Today, Zestimates are helpful enough, says the site, to give consumers an accurate sense of any home’s value. In the meantime, says Humphries, the company’s economist, “We’re always tweaking the algorithm or building a new one.”

But in the eyes of some skeptics, that tweaking only increases the potential for off-base estimates. Steve Levine, a real estate agent in Shrewsbury, Mass., says he recently changed his home description on one site, adding the fact that he has a finished basement. Over the next six months, his home rose from $516,000 to $558,000 — a healthy 8 percent — while a neighbor’s nearly identical home sank in value. Levine says he has no way to tell how big an impact his update made, “but being able to change the facts is one more tool for manipulating the system.” The sites say they believe intentionally wrong changes are rare, but acknowledge they can only go so far policing those tweaks. “It’s not 100 percent bulletproof,” says’s Doyle.

In the end, some critics say, the sites’ business models may pose a bigger problem for consumers than their algorithms. Even their flaws help to sustain the buzz around the estimates, drawing curious visitors. The online firms earn significant revenues from advertising, and the more traffic they get, the greater that ad revenue is. Zillow says 57 percent of its revenue comes from display ads from the likes of home-supply store Lowe’s, realty franchisor Century 21 and builder KB Home.’s parent company, Move Inc., generates 42 percent of its sales from listings by local agents, while says advertising is its fastest growing revenue area. Trulia expects its traffic to grow now that it has launched a beta version of an online estimator, says head of communications Ken Shuman; after all, he adds, “consumers asked for it.” As long as they keep asking, say industry insiders, stumbles in reliability aren’t especially important. “It’s not about being accurate or precise; it’s about being sticky,” says Kennedy, of AVMetrics. For their part, the sites say stickiness matters to their business plans, but that they take the estimates very seriously; otherwise, as a Zillow spokesperson put it, “we wouldn’t have a team of Ph.D.s trying to make them better all the time.” They depict the estimates as an ongoing experiment that is likely to achieve a very high degree of accuracy — someday. (At least for now, one site is deferring to agents in the home-value game: says it removes its estimates from homes once they actually go on the market.)

In the future, of course, homeowners may look at today’s estimates the way they look at those enormous console televisions from the 1940s — as an awkward early phase for what became a ubiquitous, reliable technology. But in the meantime, many are content to use them, flaws and all, whether in earnest or as entertainment. In an exurb outside Phoenix, Mike Lang, a commercial-property manager, has seen his home jump almost 20 percent in value on Zillow in the past few months — he’s not sure why. Though he’s not moving any time soon, he’s enjoying his time at the top of the real estate heap. “I’ve got the most expensive house in the neighborhood,” Lang says.

DENVER, CO – July 22, 2011 – (RealEstateRama) — RE/MAX recently named Denver-based EquityLock Solutions as an Approved Supplier of Home Price Protection, which helps minimize the risk of real estate price fluctuations within local markets. Through this program, RE/MAX agents in the U.S. would be able to offer their clients this exclusive protectionprogram.

As part of the RE/MAX Approved Supplier Program, EquityLock Solutions is among a very select group of businesses RE/MAX names as preferred vendors. Only 1 percent of applicants are accepted into the RE/MAX Approved SupplierProgram. As part of the program’s rigorous review process, EquityLock Solutions demonstrated the distinct, measurable value Home Price Protection provides to RE/MAX agents.

“RE/MAX seeks out programs that benefit both our agents and consumers,” said Mike Reagan, RE/MAX Senior Vice President, Business Alliance. “EquityLock Solutions’ program can ease the fear of buying a house, especially in a market like this. And this program, along with the advice and consultation of a trained and knowledgeable RE/MAX agent, will help homebuyers know their equity is protected.”

EquityLock Solutions launched Home Price Protection nationwide on May 6. The product is a contract givinghomeowners a financial return if the local House Price Index, as reported by the Federal Housing Finance Agency, is lower at the time of sale than when the contract was purchased. If eligible, contract holders receive a payout from EquityLock Solutions equal to the percentage of the local House Price Index decline multiplied by the value of the home when the Home Price Protection contract was secured.

“We designed Home Price Protection to help boost confidence among homebuyers, providing peace of mind that the value of their investment won’t decline as a result of factors out of their control, like the overall strength of the real estatemarket in their area,” EquityLock Solutions CEO and Co-founder T.J. Agresti said. “This relationship has huge potential when it comes to providing that peace of mind.”

Home Price Protection is available to homeowners who are currently purchasing or who already own their home. By working through a RE/MAX agent, sellers can include Home Price Protection in the sales contract as a buyer incentive, and buyers can purchase Home Price Protection directly from a RE/MAX agent.