Every homeowner wants to know what their home is worth. For many of us, the equity in our home makes up a huge chunk of our net worth, so of course you want to know! And with all the headlines regarding the housing market, it feels more important than ever to keep a pulse on it.

Luckily we live in the age of information, right? And there are tons of online resources ready to tell you what your house is worth! Zillow, Redfin, Realtor.com, Homebot… the list goes on. Sure, these algorithms can sometimes be helpful to give you a general sense of value or at least the price trends in your area, but take it with a grain of salt…

The accuracy of these algorithms is limited, and that’s become painfully obvious with the failure of iBuying. Algorithms are only as good as the data that goes into them. In this case, they’re looking at public records and listing data on the home’s square footage, bed / bath counts, lot size, year of construction, last sales prices, nearby sales, etc. All of which certainly do play a role in the value of a home… but unless you live in a planned subdivision with very little differences between the homes, these data points will not paint a complete enough picture.

The difference between valuing homes vs. other assets, is the extreme variability between each and every home. And the intangible / emotional elements that will 100% play a role in what a buyer is going to be willing to pay. An algorithm isn’t going to understand how updated your home is, how well designed it is, what the view is, whether it gets great natural light or has freeway noise in the backyard! 

So, if you really want to know what your home is worth, get a professional opinion from an experienced agent. 

Here’s our process for estimating the market value of a home:

1. Get To Know Your Home 

Seeing a home for myself, in person, is a key first step. Looking at photos and hearing about upgrades is helpful, but it’s important to see it all in real life. The design, the floor plan, the quality of materials, the exposure, the landscaping, the age of the systems, the curb appeal, the neighbors, the outdoor spaces,  these are all things that will impact the value. I will evaluate the various features and elements of your home in the context of what buyers are looking for in your particular location and price point. 

2. Comparative Market Analysis 

Next, I will prepare a Comparative Market Analysis (CMA). This involves looking at homes comparable to yours (we call them ‘comps’) that have recently sold, are currently listed for sale, or are currently in escrow in your neighborhood. The sales data is easy enough to find and is of course a major input into those online estimators… but what those algorithms don’t know is the sales price of pending sales that haven’t closed yet (arguably the BEST indicator of current value) or the level of activity / interest the active listings are getting. That’s the info we gather through agent relationships to inform our analysis. We are also able to identify which comps are actually the most relevant for your home by looking beyond the basics of size and bed / bath count, to homes that are also in similar condition and offer similar features. Most of the time, I have seen those comps in person as well and understand why they may have sold for more or less than others. If we don’t have ‘perfect’ comps for your house, we can adjust the value of the sales we do have up or down based on how they differ from yours. These comps will give us a value range for your home. 

3. Evaluate the Local Market 

When thinking about value, and even more so when establishing a listing strategy for a home, it’s important to consider the overall trends in the local market. We will look at the number of homes currently on the market in your area, what’s selling and what isn’t, and how long it’s taking for things to sell.  This information can help us determine how much demand there is for homes like yours and how quickly you can expect to sell your property.

Ultimately, the buyers will decide what your house is worth, but an effective real estate agent is your best bet in getting an accurate understanding of current market value.