One of the most challenging parts of the selling process for a house is determining how to price it. Home sale prices depend on numerous factors, including property details (such as square footage) and market trends. An online valuation tool can help you determine the fair market value of your home and price it accordingly.
What Is a Home Value Estimator?
A home value estimator is an online estimate tool that you can use to get an instant estimate of your home’s sales price based on market conditions, public records, and more.
Many listing services, such as Zillow, offer online estimate tools that can give you an idea of how much your home is worth. Ranges between estimates can vary, so it’s important to use several comparison tools to find that sweet spot of how much your home is really worth.
An online home estimation tool is not the same as an appraisal by a professional appraiser or the market analysis conducted by a real estate agent. A real estate appraiser is a type of real estate professional who has the proper certifications to appraise your home’s value.
There’s also the real estate agent, who can make a detailed comparative market analysis to analyze economic conditions and the real estate market in your area. They will look at the sales history of similar homes in your area, how many bedrooms your home has, and more to give you a detailed description of your home’s current market price and how they came to that conclusion.
A professional appraiser, on the other hand, might do something similar to the comparative market analysis, but they usually conduct a walk-through of the subject property (your home) and determine some major factors in order to price it.
That includes the age, size, overall condition, bedroom and bathroom quantity, additions, yard size and more. Mortgage lenders use appraisers to ensure the house is not worth less than the mortgage loan value. If it is, then providing the loan would be risky for them.
Property comparison tools, on the other hand, use publicly-available data and current market conditions to give you a quick estimate of your home’s listing price. An estimator tool isn’t as accurate as a professional appraisal, but it can be convenient for homeowners in the beginning of a sale process. Also, they are totally free to use.
Having a good ballpark estimate of your home’s value is important for making informed decisions about your home. Major financial decisions, such as whether to invest in renovations, require you to have an accurate estimate of your home’s value at the moment and understand the factors that can affect it.
The Benefits of Using a Free Online Home Value Estimator
If you’re a homeowner considering selling your home, it’s important to have an idea of the price to list it in its current state. Let’s examine some scenarios in which an online home value estimator would come in handy.
First, when you’re trying to figure out whether selling your home is worth it. Should you sell now, or should you wait until market conditions improve? If the sale price is lower than what you thought it would be, it might be better to wait – if the neighborhood is up-and-coming and sales prices are likely to increase.
Alternatively, you might look into making renovations to improve your home’s value. For example, upgrading the siding, replacing the roof, or remodeling the kitchen can all add value to your home. Another way to massively increase your home’s value is to add bedrooms. Build an addition to your home to increase square footage. You can also finish, improve, and add bedrooms to your attic or basement.
Some home value estimators allow you to adjust the square footage or number of bedrooms to change the estimated value. If you have five bedrooms, for example, you might be able to add an extra bedroom or two in the basement or attic, which could increase the listing price.
A professional home appraisal can be costly, and it’s an expense you might not be ready for if you’re simply considering your options and weighing the pros and cons of selling your home. In many cases, online estimation tools can be sufficient for helping you get an idea of how much to list your home for.
They are accessible to everyone and free to use. It only takes a few minutes to try different home estimation tools on sites like Redfin, Zillow, and Chase. You can compare the results from several tools, add them together, and then calculate the average value.
Furthermore, these estimation tools are generally pretty accurate. For example, Zillow’s Zestimate tool has a relatively low error rate; half of all of its estimates for on-market homes end up being within 3.2% of the final sale price.
Redfin’s tool is also very accurate. According to Redfin, its tool has an error rate of just 2.19% for on-market homes.
However, there are several factors that determine how accurate the tool will be:
- Off-market homes: Tools are typically less accurate for off-market homes. For example, Zillow’s median error rate is 7.52% for off-market homes compared to 3.2% for on-market homes. Tools use public data like property tax assessments for off-market homes.
- Location: The more rural the home is, the harder it is for online tools to get an accurate assessment. There will be fewer comparable sales in the area to base their estimates on.
- Unique characteristics: If your home has unique details, like solar panels to provide electricity, estimators may undervalue your home. The tools may not be aware of such characteristics, or it could be hard for them to accurately determine how much value such features add to your home.
That’s why it’s best to use several tools. Some sites might have access to more public records and listings to compare your home to, so they may be more accurate than others. Ultimately, consider involving an experienced real estate agent in the process.
How To Use a Free Online Home Value Estimator
An online home value estimator is never a replacement for a professional appraisal. You will need a professional appraisal before the mortgage lender approves the buyer’s mortgage. Furthermore, before actually listing your home, you might want to consider paying for your own home appraisal.
You can either hire a professional appraiser or enlist the help of a real estate agent to help you with the matter. A real estate agent will be more in tune with market conditions than the average homeowner, even if they are not certified to complete professional home appraisals.
A real estate broker will base their estimation of your home’s value on their intimate knowledge of homes in the area, their extensive experience, and your home’s condition. They might also advise you on ways to improve your home’s overall value.
For example, they might advise against building a swimming pool but recommend that you invest in landscaping services to improve your home’s curb appeal instead.
However, when you’re just dipping your toes into the water and getting into the real estate market, an online home value estimator can be a valuable tool. It’s also useful for double-checking your own estimation of your home’s value and confirming that your asking price is not too high or low.
Using these tools is pretty simple. However, there is some information you should know beforehand to verify that the results are accurate.
Here’s what you need to know before using an online home value estimator:
- Your correct address
- The number of bedrooms and bathrooms your home has
- The total number of rooms there are (including a home office, for example)
- How much square footage your home has
- What year your home was built
Once you have that information, go to an online estimation tool and enter your address. Select the correct address from the suggested results, and you will see your home’s estimate.
Depending on the tool, you may be able to see or even edit details such as the number of bedrooms, number of bathrooms, and square footage of your home. That’s why knowing this information is so important. If you see that the square footage is inaccurate, for example, or your home has more bedrooms than listed, edit that information to get a better estimate.
You may have to verify that you’re the owner of the home to edit that information, depending on the tool.
Which Home Value Estimator Sites Are the Best?
There are many home estimator tools, but the best ones are those from listings sites and large real estate companies that have access to massive amounts of data from homeowners and sellers in your area. Here are the best home estimator tools to use.
Zillow
Zillow’s tool, Zestimate, is one of the most accurate on the market, with a median error rate for on-market homes in the United States of just 3.2%. Zillow is one of the largest listing sites, so it has access to a lot of data. It bases its “Zestimates” on publicly-available and user-submitted data, including:
- Property tax assessments
- The home’s sales history
- Recent comparable sales in the area
- The age of the house
- The number of bedrooms and bathrooms
Note that error rates vary based on location. Zillow published a list of its median error and accuracy rates for major cities in the United States.
Redfin
Redfin is another large listing site. Its home estimator tool uses data from the Multiple Listing Service database and other sources to determine your final price. It allows you to edit home details, such as square footage and the number of bedrooms, after verifying ownership.
Realtor.com
Realtor.com, a leading real estate listing site, will give you a free estimate of your home’s value.
Once you claim your home, you can update your house’s details by adding information about renovations, for example. You can also edit the pictures if they are old and outdated. Not only that, but the tool will continually track market conditions and your home’s value and send you a monthly report with updated information.
Chase.com
Chase is a leading mortgage provider. Its tool provides an estimate based on millions of records in its databases. It shows your square footage, the number of bedrooms and bathrooms, and other details, which you can edit freely (without verification).
Eppraisal
Eppraisal is a property valuation and estimator tool that uses data such as neighboring home prices, recent comparable sales in the area, and home amenities and features to determine the value of your home. Enter your address into the search bar at the top of the site to start.
Key Takeaways
Knowing your home’s value is critical. Pricing it too high can drive away investors and potential buyers, while pricing it too low can cause you to lose out on thousands of dollars in potential profit. A free home estimator tool is one of the quickest and easiest ways to get a better idea of how much to list your house for.
FAQs Home Value Estimator
Here are the most common questions we see from our readers about home estimation tools like Zestimate.
What is the most accurate home value estimator?
The accuracy of estimation tools fluctuates based on location, season, and the specific home in question, so it’s important to use multiple tools instead of just relying on one. With that said, Redfin has one of the lowest median error rates at just 2.9%.
How do I find the exact value of my home?
The exact value of your home can differ from the value that an online home value estimator can give you. If you want to find the precise value of your house, hire a certified appraiser to complete a walk-through and complete an appraisal report.
How do you estimate the value of a property?
You can estimate the value of your property without an online tool, but it’s harder. You will need to look at similar listings in your neighborhood –homes of a similar size and with the same number of bedrooms. Use multiple listing sites to conduct a comprehensive market analysis. Of course, there’s no need for any of this if you have a real estate agent in charge of your home sale.
How do I find the property value of my area?
It’s best to get the help of a real estate agent to determine accurate property values for your area. A real estate agent will have access to more tools than you. Although they might not be a certified appraiser, they will be up-to-date on market trends and be aware of similar homes for sale near you.
Is Redfin or Zillow more accurate?
Redfin is slightly more accurate than Zillow, based on the error rate that both platforms have disclosed. However, they are both similar in terms of accuracy. In any case, it’s worth using both platforms to get a more accurate picture.
