Estimate Your Home Value - 4 Techniques
Have you ever wanted to estimate your home's value? Here's a few different ways that you can reliably get a ballpark figure, for table conversation, if nothing else.
Estimate Your Home Value: 4 Techniques
Before we talk about how much your home is worth, who remembers the good ol’ days of The Price is Right with Bob Barker?
Outside of the upbeat music and colorful games, the show was a hit with the audience because it was loads of fun to guess how much everything cost.
But as it turns out, it’s just as fun to guess the price of something you already own…like how much your home is worth! And instead of winning an electric toothbrush or an overpriced dinette set, the prize may be an increase in wealth for you as the homeowner
With a mix of digital tools and the help of a real estate professional, it’s possible to get a precise look at how much your home is worth in today’s market.
Here are four ways to estimate how much your home may be worth.
#1: Zillow’s Zestimate
Ah, the Zestimate.
Founded in 2006, it may not have been the first company of its kind, but it has certainly become a household name (see what I did there).
The Zestimate tool provides its home value estimate based on your zip code, submitted user data, and current market conditions. Or at least, that’s the abridged version of how they get their estimates.
The Zestimate tool is based on a proprietary algorithm that is for Zillow’s eyes only. Fair enough, why would they want to be giving away their zesty, secret sauce?
However, Zillow also encourages homeowners to check with a few information sources when evaluating their home. Check out this screenshot from Zillow’s website — I highlighted a few key points.
Zillow themselves will tell you it’s important to look at a few sources before making a final call on how to price your home. Otherwise, you may end up like this homeowner who saw fit to file a lawsuit on Zillow for “repeatedly undervaluing her house.”
#2: Redfin Price Calculator
Redfin is one word, by the way. Common misconception.
Headquartered in Seattle just like Zillow, Redfin has been around since 2004. Lately, they have risen to extraordinary popularity especially with the real estate boom in the Seattle area.
Much like the Zestimate, Redfin’s home price calculator uses its own unique algorithm. However, it also puts you in touch with a Redfin agent who can give you a “consultation” on how much your home may be worth.
Another info nugget Redfin provides is the pricing breakdown of how much you would pay out a traditional real estate agent versus the cost of a Redfin agent.
Redfin agents are cheaper than a traditional real estate broker. However, they’re able to charge far less because they don’t allocate the same level of resources and time dedicated to selling your home. Redfin has a lean process that doesn’t leave much room for direct interaction with the client.
Lily He-Prudhomme of The Frugal Gene did a great guest post on Mustard Seed Money breaking down the pros and cons of Redfin versus a traditional agent. I recommend checking it out.
#3: Real Estate Professional CMA
A thorough comparative market analysis (CMA) by a real estate professional is one of the most precise ways to estimate the possible sale price your home.
Proper CMA’s are not just assumptions based on an algorithmic look at data. When a real estate broker conducts a CMA for you, they will tell you how much your home is worth based on many different variables:
- Active comparable properties
- Sold comparable properties within a short enough window
- Analysis of the current market
- Assessing value based on construction years, types, and more
- Adjusting for differences in the compared properties
Some brokers will even include a look at the Zestimate or Redfin price estimate for a comparative look at the difference in how much the machines believe your property is worth.
An upstanding real estate broker will also be able to walk you through their logic on how they arrived at their final figure. You can collaborate together as a team and ensure you’ll be getting the best price for your home on the market.
If you’re interested in how much your home is worth, I can provide a complimentary CMA report. Just contact me below, and I'll be happy to coordinate the details with you.
#4: Appraisal by a Washington State Certified General Real Estate Appraiser
Appraisers are typically brought in by the buyer’s bank to ensure that they’ll be able to recoup their losses if the mortgagor is unable to pay back the home loan. Banks like to hang onto their dough — they don’t want to loan out more than your home is worth just so you can afford that extra media room or outdoor pool.
Becoming an appraiser is quite difficult. These are some of the requirements in order to be a Washington State Certified General Real Estate Appraiser and appraise how much your home is worth.
- 300 Classroom Hours
- 3000 hours of appraisal experience earned in a period no longer than 30 months
- College-level Bachelor’s degree or higher
Appraisers are rigorously trained in order to provide viable valuation of your home. And since they’re a neutral party to the transaction, you can be confident that they’ll give you an honest report.
There you have it! Four ways that you can estimate how much your home is worth. If you’re looking for a professional opinion on the potential market value of your home, feel free to get in touch with me. I’m here to help answer all of your real estate questions.