Real estate appraisal and land valuation is the process of putting a price on the value of property. Buy and sell transactions generally require an up-to-date appraisal because each property is unique and values are based on the current economic landscape.
In the past, it was necessary to hire a professional real estate appraiser to conduct an onsite property visit to make this assessment. Granted, an onsite appraisal is still considered the most accurate because it involves a thorough review of the home, including the roof, siding, foundation, windows and doors, flooring, walls, plumbing, electrical, kitchen and bath updates.
However, it is also possible to get a relatively accurate appraisal using automated valuation models. Fortunately, there are a variety of websites that can provide this valuation for free. In addition to basic criteria such as square footage and the number of bedrooms and baths, online appraisals rely substantially on a comparative market analysis (CMA). This is basically a calculation of data from similar homes that have recently sold (within six months to a year) in the same geographical proximity. Online appraiser tools generally utilize publicly available data to estimate a home’s value without having to consult an appraiser or real estate professional.
The following is an overview of some of the most popular websites for establishing a home’s value. By comparing the estimates of several sites, you might be able to establish a reliable value or value range.
The real estate website Zillow offers a tool called “Zestimate,” which basically compiles an appraisal based on comparable homes in the same general locale. For most homes where public data is accessible, Zillow provides an automatic home value evaluation based on comparable home sales, local tax assessments, and market appreciation of local home values over 1-, 5- and 10-year periods.
A homeowner also has the opportunity to adjust his own real estate appraisal. To use this function, he should set up a free user account. This will require an email-based verification process to ensure that he is the actual owner of the property. Once he is logged into his Zillow account, he should enter his home address to get started.
Zillow automatically uses public data in its proprietary formula to estimate the value of a home. The formula looks at factors such as number of bedrooms, number of baths, square footage and location, and assigns a weight to each factor. However, the website also enables a homeowner to edit the home’s information, such as upgrades like a new bath, deck, swimming pool, renovated kitchen, new roof or HVAC. Next, the homeowner can choose comparable homes in the area that have sold recently. This means if one home sold way under market price for the neighborhood because it was a fixer upper or private sale, he can exclude that home from the CMA calculation. Comparables also can be viewed on a map to determine if they are in a similar neighborhood from a value perspective. Once the owner has selected comparable homes, his Zestimate will be updated as a Private Estimate.
RealtyTrac works similarly to Zillow, using publicly available data to generate an online appraisal tool called Home ValueTrac. Enter the street address, city and state or zip code to receive an estimate of median value as well as an estimated change in value over the last month.
Chase Bank offers a free home property value tool for online users. Enter the property address to receive a price range rather than an exact number. This tool also provides an estimate value for surrounding homes in the neighborhood.
Not only can you list your home for sale on this website, but it offers a simple tool to help establish your home value. Simply enter your address and the Pricing Scout instantly estimates your home’s value based on nearby comparables. The tool provides an exhaustive list of the most recent sales of comparable homes in the area, detailing their address, bed/baths, square footage and sales price. The property valuation tool illustrates where your home value lies on a scale of nearby properties.
While online tools can provide a general estimate, they do not necessarily dictate the price you would receive at sale. In addition to using a home appraiser, you will want to meet with two or three real estate agents for their market value estimate, as they probably have better insights into your local market. Clearly, home appraisals are not an exact science. Whether using an online tool or personalized estimates from professionals, your estimates will almost always vary within a range.