When considering a home purchase, or a refinance for that matter, knowing the value of the associated property is paramount.
Getting a precise assessment of what a property is worth is one of the most important aspects of real estate, and especially critical to the bank or lender providing financing.
After all, it is the bank that owns your home until the mortgage is paid off, so they too have a financial interest in the property in question.
From the lender’s standpoint, the house itself acts as collateral, so it is imperative to have an accurate appraised value when providing financing.
This is also obviously very important to the seller, who will want to list for the highest price possible, but also to the buyer who will want to acquire the home for the lowest price.
And while a buyer and seller can agree to any market price, an appraisal is often used to substantiate the value agreed upon. An appraisal is conducted by an objective third-party to provide an accurate market price based on the attributes of the home, its location, comparable sales, and so on.
Getting an Online Home Value Estimate in Seconds
Appraisals used to be hard to come by unless you hired a professional, but thanks to the advent of the Internet and related technologies you can now pull up a valuation in seconds.
Nowadays, several real estate websites, like Zillow, Redfin, and Trulia (to name just three) offer a great deal of information on virtually every residential property in the United States.
Zillow is probably the frontrunner in the automated appraisal business, with its Zestimate now a household name. I’ve written about those at length. There’s also a smaller company called eppraisal.com, but their estimates seem pretty weak and unexceptional.
In short, the estimate or value Zillow comes up with might be far off or spot on, depending on the market and recent comparable sales.
From what I’ve seen, the data always seems to be delayed though, and thus the values tend to lag reality. If anything, you get a quick little ballpark figure, and you can track it over time to see which way the market is headed.
But you can’t actually use these estimates for anything more than entertainment value. A lender won’t take them seriously, and they’re often susceptible to massive swings in value.
However, these websites also provide a lot of other useful information such as recent sales nearby the property and the all-important transaction history for the subject property. It’s good to know what the property sold for in the past before you go overpaying for it…
If you aren’t ready to pay for a full home appraisal, try the free appraisal tool from Zillow.com below to get a quick, ballpark estimate of the value of your home. It’s far from perfect, but you get what you pay for.