When you are selling your own home, choosing the price can pose a challenge, but to guide you through the process, a number of home value estimators are available. These online tools can be useful, but you need to use their information carefully. Here’s a look at how they work and how you should implement them into your selling process.
What Is a Home Value Estimator?
Simply, a home value estimator is an online tool to assess the value of your home. You enter your address and the tool generates an estimated home value based on local real estate data.
How Do Home Value Estimators Work?
Home value estimators take information from the multiple listing service (MLS) in your area, and they use the prices of recently sold homes to generate the projected value of your home. In some cases, these estimators also take into account other details, such as whether or not you have a basement in an area that has a lot of tornadoes, and they adjust the estimate accordingly based on that criteria.
What Are the Benefits of Using an Online Estimation Tool?
These tools can create an estimate for your home within seconds, which can help guide you as you price your home to put it on the market. Most of the tools are updated on a regular basis, giving you the chance to tweak your pricing as needed while your home is on the market.
What Are the Drawbacks of Home Value Estimators?
The major drawbacks are two-fold. Some estimators only have certain addresses and may not have data for remote areas. Also, a margin of error exists of up to about 8% exists. Although this sounds relatively small, it can equate to a difference of $32,000 on a $400,000 property. For that reason, it’s important to take the numbers with a grain of salt and consider consulting with a professional assessor if you’re worried about pricing your house to high or low.
Which Value Estimators Should You Use?
The two main property value estimators on the internet were created by Redfin and Zillow and both have pros and cons. Zillow has a larger margin of error (7.9%), while Redfin boasts an error margin of only 1.96% for homes on the market and 6.23% for off-market homes, meaning a Redfin estimate is likely closer to your home’s true value than a Zillow estimate.
To generate more accurate values, Redfin also takes additional features into account – like whether or not your home has a great view. Zillow, on the other hand, has a much larger database with two to three times the number of estimates.To get the most accurate number, we suggest using both sites and averaging the results.
Home value estimators are a great tool that you can use to get a ballpark idea of your home’s value.