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How do you find accurate figures for your home’s value?
Sorry to say, but you can’t find an accurate representation of your home’s market value by just doing a few searches online. Yes, several websites are claiming to provide an instant home estimate. I’ll even list some of them below.
But the truth is – this is merely a ballpark estimate, a good starting point. These online tools, called automated valuation models (AVM), use algorithms, public records, recent sales, local market conditions, and tax assessments to generate an estimate. They’ll consider the number of bedrooms and baths, square footage, location, etc. However, they have no knowledge of the condition of the home. They don’t consider things like upgrades you’ve done, curb appeal, or external factors. Every AVM uses a different methodology, so you may find your estimate will vary amongst these sites.
The best way to get an accurate estimation of value is to request a Comparative Market Analysis (CMA) from a Real Estate Agent. It’s free, personalized for your home, and done by a human, not a bot.
What is a CMA?
The CMA is a side-by-side comparison of homes for sale and recently sold homes in the same neighborhood and price range. This information is further sorted by type of home, the number of bedrooms and baths, lot size, neighborhood, property condition, features, price trends, and many other factors. Its purpose is to show estimated market value based on what other buyers and sellers have determined through past sales, pending sales, and homes recently put on the market.
How is a CMA created?
CMAs are generated using property information from your agent’s multiple listing service (MLS). The MLS is available to licensed members only, including brokers and appraisers, who pay dues to access the service’s public and proprietary data, including tax roll information, sold transactions, and listings entered by all cooperating MLS members.
Automated valuation models are not entirely wrong. They just haven’t figured out the kinks yet. Maybe in 5-10 years, the algorithms will be so good I’ll be out of a job. But until then, if you are in the Denver area, you can click here to contact me for a free CMA.
Sources:
Coldwell Banker Realty Comparative Market Analysis
https://www.bankrate.com/real-estate/how-much-is-my-house-worth/
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