Setting Your Price: Home Value Estimates Can Help

So you’re about to put your home on the market but are unsure of its current market value. A good place to start is by getting a home value estimate (HVE). This is an automated report that relies upon complex algorithms and public records to estimate your home’s market value.

A home value estimate is not a direct substitute for an agent-performed Competitive Market Analysis (CMA), which draws on your agent’s expertise as well as recent sales figures for similar homes in your area. While an HVE also uses sales statistics in its calculations, it relies on public databases and so may use slightly different numbers. Still, while not perfect, it’s an easy way to get a quick idea of how much your home is worth.

The pros of home value estimates

• User-friendly, usually requiring only an address and other simple information
• Usually inexpensive (and sometimes free), depending on the depth of the research and how quickly you want the report
• Can provide data that is not included in a competitive market analysis, such as property information, a description of comparable properties, the home’s tax value and community features such as demographics and price trends.
• Doesn’t rely on anyone’s judgment, so it may be more objective than a CMA that requires input from an agent

The cons of home value estimates

• Doesn’t always deliver the best conclusion because it does not factor in features such as upgraded finishes, which an agent would acknowledge and take into account
• Relies on public records, which may be inaccurate or incomplete

There’s no reason why you can’t get both an HVE and a CMA -- especially since they are bother either free or inexpensive. Compare the results when setting your listing price. If the results are similar, you’ve got a good starting point to decide price. If they are significantly different, speak with your agent to find out why.