As a homeowner, even if you are not planning to sell your house, it’s always useful to know how much your house is worth in the market. And with the Internet making everything easier nowadays, there are many online tools that can help you find out an estimate of the financial value of your home. But it is important to keep in mind that what your computer can deliver to you may not be the exact value of your home. It is only an estimate.
But the thing with real estate is that there is hardly ever any exact number. It’s not just computers; even people cannot come to a definite, accurate value for a home. If you talk to more than one real estate agent, they will also most likely give you different numbers. This variation proves that since no one, not even people or computers can come up with an exact number for the value of a home, the communication and negotiation of the people involved, whether buyer, seller or agent, is extremely important.
Factors that determine a home’s value
Firstly, it is important to know that not just your house, but your neighborhood plays an important role in the value estimation. For example, if your house is located downtown or somewhere in a posh, residential area, it will definitely be more expensive. Even if it’s just a one bedroom, one bath home, it’s worth maybe even more than a suburban house depending on its location.
If your house has a unique feature or design as compared to other homes in your neighborhood, it would be much more difficult to find comparable homes, often called “comps”. It is also more likely that the estimate will be less accurate than if your neighborhood had mostly similar houses. Especially if there have been very few home sales in your area, you will have lesser data to work on, reducing your chances of reaching an accurate estimate of your home’s worth. But if your neighborhood has seen several sales, you will likely have a more accurate estimate
Comparison plays a huge rule in coming up with an approximation of home values. CEO of Redfin, popular residential real estate company, Glen Kelman says that it is more difficult for a computer or human to price a home the more outlier it is. This is because one of the biggest challenges real estate agents have to face is which houses are comparable and which are not.
Online tools you can use
There are several online tools that can help you calculate an estimate of the financial value of your home. They all make use of data available on public records and listing services that real estate agents use, like recent sales made in your neighborhood, to give you an approximate calculation of how much your home is worth in the current market. Availability of data, without a doubt, also affects just how accurate the estimate will be.
Here are some of the most popular online tools used for home value estimation:
The most widely-used and accurate tool used to estimate home values, Zillow lets users enter information about their homes or correct any information. It also has a Price This Home feature, which allows users to receive an estimate based on comps they themselves choose.
This enables you to see listing information and photos for exact comps on which the estimated value of your home was based on.
Using Chase, you can change data about your home so that you can have a more accurate estimation. You can also see recently sold houses in the area.
- Bank of America
Although this shows only a range of possible values and not a single estimated number, it is still widely used.