Valuation Options: How Much Is My House Really Worth?

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You didn’t know any better

First you check Zillow, then Redfin, and maybe you scope out your county assessor's website or ask a real estate agent, but suddenly, your house now has four different values. 

How can you be sure which is the right one? Truth is, there isn't one valuation tool that's right for every situation and it’s okay, you didn’t know any better. 

An online home estimate can be useful when you're curious and a Comparative Market Analysis (CMA) can help when you're thinking about listing your home, but an appraisal provides an independent opinion of value when you need something more property-specific and supportable.

Forget about which value is right, focus on why you need to know what your home’s value is.

Why Are the Numbers So Different?

This question comes up constantly among homeowners online.

For example, let’s say a homeowner is trying to understand their home's current value found estimates ranging from $700,000 to $955,000 depending on whether they looked at their county assessor, Zillow, Redfin, or their mortgage lender. Meanwhile, another homeowner saw a Zillow estimate of $517,000 and a Redfin estimate of $743,000 for the same house.

That's more than a $200,000 difference and that's where homeowners can understandably start wondering: How can my house have so many different values? The answer is that these numbers aren't necessarily trying to accomplish the same thing, or being developed the same way.

There may be one or more reasons why you want to know what your property is worth. Let’s break them down to help you make a real estate decision based on the underlying reason(s). 

I Just Want a Ballpark Number

Most people will start online because automated home-value estimates are convenient. Enter an address and seconds later, you have a “magic” number. But it's still an estimate generated from available data.

A computer doesn't walk through your house, stand in your renovated kitchen, see the condition of your property onsite, or necessarily understand why two homes that look similar on paper may appeal differently in the market.

That's why two online platforms can look at the same property and produce different answers.

Sun Pointer: If you're curious, start with the free tools. If you're making a financial, legal, or real estate decision based on the number, ask whether the tool you're using is appropriate for that decision.

I'm Thinking About Selling

This is where your real estate agent can become an important resource. A Comparative Market Analysis, or CMA, uses relevant market information and comparable properties to help an agent develop a pricing strategy.

If you're preparing to list your house, you aren't just asking what the property might be worth. You're also deciding how to position it in the current market to attract buyers. That's partly why a CMA can be particularly useful when selling.

We've covered the differences between a CMA and an appraisal in more detail in our Appraisal vs. CMA piece.

I Need More Than a Ballpark

There are times when curiosity turns into a decision. Maybe you're:

  • Navigating a divorce or estate

  • Working through an inheritance

  • Making a significant financial decision involving your property

  • Disagreeing with someone else about what the property is worth

  • Trying to establish what the property was worth at an earlier date

  • Considering selling a unique property with few good comparable sales

  • Simply uncomfortable making a major decision based on an automated estimate

That's when an appraisal may make more sense. An appraiser isn't just looking for a number attached to your address. Property characteristics, condition, location, market activity, comparable sales and other relevant factors can all be part of the analysis. 

Even when selecting comparable sales, Fannie Mae's appraisal guidance recognizes characteristics such as site, room count, finished area, style, condition and external factors as considerations that can affect comparability. The result is an independent opinion of value developed for a specific property and intended use.

But Zillow Says My House Is Worth More

Sometimes Zillow is surprisingly close to an eventual appraisal. 

For example, a buyer may see a Zillow Zestimate come in at $581,000, while their appraisal comes back at $630,000. 

The takeaway isn't that Zillow is “bad” or that an appraisal will always be higher or lower. It's that they're different valuation tools and an online estimate shouldn't be expected to predict exactly what an appraiser will conclude after completing an assignment.

What About My Property Tax Assessment?

Your assessed value is used within your local property-tax system. It shouldn't automatically be treated as the same thing as your home's current market value.

At times, we’ve seen homeowners comparing assessed values with online estimates, lender valuations, asking prices and appraisals and finding completely different numbers. They're different numbers because they're being generated for different purposes.

Which Option Should I Use?

There's no reason to pay for more valuation than you actually need but there's also a point where a free estimate doesn’t provide enough information for the decision you're trying to make.

Here's the simplest way to think about it:

We get why homeowners want to know: “How much is my house really worth?”

It's probably one of the first questions we'd ask, too, but before chasing numbers across five different websites, start with something simpler: What am I going to do with the answer?

That question can tell you a lot about which valuation option you actually need.

Need More Than an Online Estimate?

Sun Point Appraisals provides residential property valuation services for homeowners, real estate professionals, lenders, attorneys, and others who need an independent opinion of value.

Depending on your situation and location, that may include a traditional appraisal or other valuation service appropriate for the intended use.

Not sure what you need? Tell us why you're trying to determine the property's value first. We can help you understand the appraisal services Sun Point offers and whether one may fit your situation.

Office: 888-595-0188
Email: support@sunpointappraisals.com
Website: www.sunpointappraisals.com

Disclaimer: Sun Point Appraisals, LLC is here to educate, inform, and occasionally make property valuation easier to understand. The information we share is general in nature and isn't an appraisal, opinion of value, legal advice, tax advice, or financial advice. Every property and assignment is different. When a decision depends on a property's value, talk with a qualified professional about your specific situation.