How Do I Determine the “True Value” of My Home in Today’s Market?
Have you ever wondered why there can be such vast differences in home valuations when you compare Zillow estimates, tax-assessed values, and professional appraisals? It’s a common conundrum that we find often leaves homeowners perplexed.
Let’s look at these in more detail:
Zillow’s Zestimate
The “Zestimate” on Zillow’s site is probably the value we find homeowners quote the most often when asked what they think the value of their home is. However, relying solely on these automated algorithms that change multiple times during the week can lead to discrepancies. Zestimates do not consider unique features, recent renovations, or the functionality of the floor plan.
Tax Assessed Values
Although cities are working to improve their accuracy, historically outdated values tend to lag behind current market conditions, resulting in values that are often too high or too low.
Appraisals
An appraiser is a professional who assesses the value of a property, which differs from a real estate agent. Appraisals are typically used when a property is about to be mortgaged or when a specific value is required to resolve a legal issue like a divorce or estate settlement. Although appraisals are often more accurate than Zestimates, appraisers may not have complete knowledge of neighborhood boundaries that can significantly impact property values. Appraisals generally rely on the square footage and number of bedrooms and bathrooms rather than on the functionality of these spaces or specific amenities that could add value to a property despite having less square footage.
The Realtor’s Difference
Although Zestimates, tax-assessed values, and appraisals have their merits, a knowledgeable Realtor will also consider current market conditions, neighborhood features, and current renovations that are all part of determining your home’s actual market value. Most importantly, they can guide you in setting the appropriate price for your home to achieve your desired goals, whether it be maximizing your selling price or working within a specific timeframe.
