Table of Content
- You May Be Able to Get Rid of Your Private Mortgage Insurance
- Knowing Your Home’s Value Is Essential
- Should I use a home value estimator when buying a home?
- other home value estimator options
- How do our free home value estimates work?
- How to get an accurate home value estimate
- Why your home value estimate may be even less accurate
This feature is really helpful if you have a set budget and only want to look at your price range properties. Realtor.com is the official website of the National Association of Realtors. It won second place in Newsweek’s top three real estate databases for 2020.
Market value is the value of a house at the time it’s placed on the market; it’s the price a buyer is willing to pay for a person’s property based on perceived value. This perceived value could be higher or lower than the market value. The values on home value estimator sites aren’t appraisal values, either. An appraiser determines the home’s appraised value based on various factors, mainly how much homes in the neighborhood have sold for recently. Home value estimator sites may consider the market and appraised values along with other values to arrive at their estimates.
You May Be Able to Get Rid of Your Private Mortgage Insurance
Understanding the value of the home is important if you ever want to sell, refinance or borrow against your home’s value. Most ways of determining your home’s value are more art than science. GoodFinancialCents.com has an advertising relationship with the companies included on this page. All of our content is based on objective analysis, and the opinions are our own.
Chase Bank’s home value estimator ranks as one of the worst we reviewed. Like PennyMac and other estimators, it frequently uses outdated comparable sales to estimate a home’s value. Bank of America is one of the few large banks offering a free home value estimator, but the bank’s size and mortgage experience don’t translate into more accurate home valuations. Like other home value estimators, recent upgrades or renovations likely don’t impact your valuation (unless they’ve been reported on your property’s tax records).
Knowing Your Home’s Value Is Essential
Zillow's median error rate for off-market properties is approximately 7%. While that sounds accurate, it means that half of its off-market properties sell for within 7% of its Zestimate, while half do not. Zillow home value accuracy also depends on the location and market of the home. Their home value estimators are fast and easy to use, allow users to track local market trends, and provide the option of editing home facts. Its home value website provides useful local market information like an estimated time to sell and a housing market conditions tool.
If you skipped the permitting step, you would run into issues when you try to sell your property without permits. What are the changes the neighborhood has experienced or is currently experiencing? Enter an address above and see the Automated Valuation Model estimates for your home. Keep in mind that this is only a starting point as estimates vary greatly across national AVMs. Establishing the right asking price is critical to the home selling process.
Should I use a home value estimator when buying a home?
These insights can help you understand the current housing landscape in your area and make it easier to jumpstart the process of buying, selling, or updating your home. Eppraisal.com uses public records, property information, and recent sales of similar houses in the area to come up with their estimates. It can take some time to update estimates, depending on how long it takes for different municipalities to update their records.
This data discrepancy can cause home value estimator tools to give inaccurate prices. For sellers, a home value estimator will give you a ballpark estimate of what your home may be worth, but don’t rely on it to set your list price. Home value estimators are inaccurate and a real estate agent can provide a more accurate estimate for free with a CMA. Unlike Zillow and Redfin, Realtor.com doesn’t share its median error rate, so it’s impossible to know how accurate its valuations are. In addition, Realtor.com does not provide any local sales information, so you can’t see which comparable home sales it chose to determine your home value estimate.
The mortgage lender typically requests one to ensure that the property isn’t overpriced and that the lender is giving a fair amount for the mortgage. So the appraisal is more about protecting the lender’s interests, not yours. So the risk of a home value estimator overestimating what a property is worth could translate into you making less than what you expected — or even losing money on a property. Plus, realtors are local experts — they know your neighborhood better than an algorithm ever can, so they know the nuances of what buyers are looking for.
There are types of insurance that will require that you provide a value for your house in order to issue certain types of policies. Many of the most reputable and popular sites are completely free to use. Depending on the circumstances, a free estimate from a trusted website may be all you need.
Algorithms struggle with determining the condition of a home, which is a big reason why they’re often off by large margins. You should not want to make any decisions about whether or not to buy an investment property based on what a home value estimator says. Home value estimators have wide margins of error — often between 2% to 7% — that can translate into tens of thousands of dollars. Your realtor will use houses that are far more comparable to yours — and therefore get you a more accurate home value estimate than an algorithm ever could. Your realtor will handpick different properties that are most similar to yours, based not just on quantitative measures, but on qualitative measures that an algorithm can’t compute.
If you are considering buying a new investment property, then a paid estimator may provide some value. However, there’s no point in paying for an estimate if you need to sell your home. A real estate agent can get you a far more accurate CMA for free and with no obligation.
Knowing the value of your home can allow you to borrow against your home and open up a home equity line of credit, or HELOC. You can then use this extra line of credit as a way to handle major home renovations or take care of other expenses. Many owners may be wondering to themselves, why should I be looking into the value of my home? Surprisingly enough, knowing the value of your home is essential for those who plan on selling and those who don’t.
We also layer homes currently for sale that your home will be competing against. Even multiple estimates from accurate home value sites can’t replace an appraisal. To truly get the best estimate of your home’s value, you’ll have to pay for a professional appraisal. In other cases, it makes sense to pay a professional to appraise your home’s value. Essentially, any situation in which you’ll be borrowing money or working with a lender merits a professional estimate. This includes buying another property, refinancing your mortgage, selling your home, or taking out a home improvement loan.
You can get the full scope of your home’s value, including those that over- and underestimate its worth, with multiple estimates. Taking the average of these results allows you to overcome discrepancies, giving you a better idea of your home’s actual value. As always, be on the lookout for cyber scams and think twice about sharing personal information online. While many home estimators are trustworthy, someone may attempt to steal valuable personal information under the guise of operating a home estimate site. Each website has its own criteria and factors for deciding a home’s value; this means you could get a different value from every site you visit. Some sites will be transparent about how these results are calculated, while others offer little insight into their process.
If you’re selling your home, the buyer will typically foot the bill. Each tool has its parameters to determine a property’s value, so you’ll likely get different estimates of varying accuracy from each website. Since many input sources go into each calculation, property value estimates can vary from one source to the next. Although no automated model is 100 percent accurate, viewing data from multiple sources gives you a more complete picture of a home's potential value.
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