Do you have any idea how much your home is worth today? Many people only consider this when it is time to sell, or to question a tax assessment. Considering that a home is one of the most valuable assets for many Americans, it seems wise to keep a periodic check on its value.
Fortunately, it is relatively easy to get an online assessment of your home. Perhaps the two best-known sites are Zillow and Trulia, but there are alternatives. Realestate.com, MSN Real Estate, and Realtor.com have similar estimators, as do many other real estate and financial institution sites.
Zilllow is famous for their online “Zestimates” of the value of your home. Simply put in your address and receive a number straightaway.
These values are calculated using an algorithm with available public data – the sale price and tax history among them. Trulia uses a similar algorithm to produce an estimate for your home based on information such as the square footage and number of bedrooms, as well as the recent sales information.
You can access and edit any incorrect entries with respect to your home, including remodeling and home improvements – although you generally cannot add any updates or remodels that have not been reported to the tax assessor and formally assessed. The algorithms have no way to account for these changes.
The information is updated frequently to reflect recent sales and any other factors that are matters of public record.
Other sites allow you to draw your own conclusions by showing information on the sales of comparable homes in your area. You are typically shown anywhere from two to five comparable homes in your area that have recently sold, and allow you to derive your own home value just as an assessor would do, through evaluating the differences and similarities in your home and the comparable homes.
What should you do if the assessment comes up significantly different from your expectations, either high or low?
- Check for Errors – Sites that are deriving their values through public information may be using data that is outdated, or just completely in error.
- Condition Issues – Have you made improvements in the home that have not been included, or has your home or neighborhood been degraded in any way that would shift prices?
- Check Other Sites – A 7-10% differential in the values between sites is likely and 20-50% or greater difference is plausible. Check your home value on several different sites and average them to get the best value. Throw out any values that seem far out of line with the others in either direction.
You don’t necessarily need to take steps to correct a bad estimate. However, a value that is extremely low could affect the sale of your home. Since potential buyers tend to use these sites as a first pass on evaluating homes, they may conclude that you have overpriced your home and may not bother to look into the details. There should be a mechanism available for you to challenge and correct the value.
Whatever you do, do not use these estimates as a guide for the proper selling price for your home. There is no substitute for a proper appraisal by a professional who can lay their eyes on the entire home and take into account all factors, whether positive or negative.
Remember, the key word with all these sites is “estimate”, and none of them is promising you anything other than an estimate. Stay away from any website claiming their value is anything other than an estimate. Remember that only you can determine at what price you would be willing to sell your family home.