How Do I Know How Much My Home Is Worth?

Thinking of selling? Want to refinance your home? If so, the first thing you're probably asking is, how much is my house worth?

There is no shortage of online home value tools in today's digital world, but how accurate are they? To calculate the actual value of your home, you must consider a broad spectrum of factors. Here's what you need to consider, plus how to get started!

How Much Is My Home Worth?

The quick answer is: whatever someone will pay for it.

A more comprehensive answer will depend on several variables, including what's happening in the housing market, particularly in your area. For example, is the demand for houses high but supply is low? In this case, you are likely in a seller's market. What your home was worth a year or two ago may no longer represent its current value. When supply and demand are not balanced, values become more of a challenge to determine.

So, how do you find out what the value of your house is?

You lean on tools and industry experts to paint a clear picture. This leads us to our next question — is one more favorable than the other? How accurate are online valuation tools, and how do they stack up to working with a local industry expert?

How Zillow, Redfin and Realtor.com Value Your Home

If you search "how much is my house worth?" online, you will get dozens of hits, showcasing the top home value estimators. According to NerdWallet, 22% of homeowners in the United States determine the value of their home using this method. The technical term for these tools is AVM, "automated valuation model." Two of the big players in this space are Redfin and Zillow. These tools leverage the data available from public records, such as tax assessments and property transfers. Using mathematical modeling, these tools aim to predict the value of your home based on the most recent listing prices and sales in your area. Unfortunately, both companies have a reputation for low accuracy. There has been instances where homeowners (unsuccessfully) sued Zillow because the estimates were so far off.

Both of these companies warn users that the estimates provided should be used only as a starting point. The figures provided are not appraisals — they are simply algorithm-based computer estimates. They should certainly not be used as part of a bargaining strategy. 

Online home value tools only consider certain factors because they do not often have access to the same information that a local real estate database has. This lack of information creates skewed results. This means you will only get a partial estimate, resulting in a figure that isn’t accurate. These tools are not ideal when dealing with fast-moving markets, especially when homes are selling in a matter of days. That is why an estimate on Redfin may significantly differ from the one you got on Zillow.

Nothing Beats Working With a Local Real Estate Agent. 

There is no better substitute than working with a local industry expert. 

Unlike most third-party real estate sites, local real estate agents have access to the information you need to ensure greater accuracy. Your local real estate expert will dive deeper than Redfin or Zillow, providing you with a comparative market analysis. They will also be able to give you a more accurate value based on when your house was last renovated, the condition of the property, the type of view you have, the amount of natural light inside, and the list goes on. Reach out to me today and I'll set an appointment with you to complete a full market analysis and strategy to get your home SOLD!