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What to know about the accuracy of online home value estimates

Mortgage Rates
Posted at 3:03 PM, May 19, 2021
and last updated 2021-05-19 17:03:18-04

The housing market is hot right now. You may have even heard stories of home buyers overbidding by tens of thousands of dollars on a home and still having their offers rejected.

On the other hand, many are finding this to be a great time to sell and they may even check out their own home values online.

However, some of those estimates aren't always accurate.

Some sites offer estimates on what your home might sell for currently. They usually use public tax information to come up with these numbers.

But real estate agents say both sellers and buyers shouldn't depend on this information to gauge how much a specific home is worth.

The information can still be useful though.

“They would have an idea of what a certain neighborhood that they’re eyeballing, and say, ‘oh I like that neighborhood,’ and they look and see that it’s way above their price range,” said Susan Janney, a real estate agent with Long & Foster.

Estimates can vary on both ends. In some cases, online estimates can be under-calculated. This could be because improvements were made on a home without a permit and there's no tax information reflecting that.

Online estimates can also be over-calculated. And because this is a seller's market, many are tempted to not make any improvements on a house, but still want to sell at the higher price that's listed on real estate websites.

Janney says while the market is hot, it doesn't mean buyers are willing to pay the higher price. Instead, sellers should get a comparative marketing analysis (CMA) from a licensed real estate agent, and they must see the inside of your home.

“A good, experienced agent is going to be looking at the specifics of that house compared to other houses that have sold and looking at the pluses and minuses of one against the other,” said Janney.

In some cases, you may want to consider getting a CMA from at least two real estate agents.