What is the most accurate home value estimator?
As crazy as it sounds, the buyer is typically the most accurate home value estimator. A home is only worth what a buyer is willing to pay and this is why a list price is called an "asking price".
After the buyer, a licensed appraiser will give you the most accurate opinion of value. If there's a lender involved in the transaction, the appraiser's opinion of value is what the lender will use to determine the maximum LTV (loan to value) ratio.
Interestingly, a licensed real estate agent cannot give you an estimate of value, only an estimated sale price range tough often the appraiser's final valuation will be very close to the market analysis performed by an experienced Realtor®.
Very last on the list are software based valuation tools such as Zillow. These are called Automated Valuation Models (AVM) and in some states they can get you within a certain margin of error, however, that's where their accuracy stops. They can't determine whether your 1980 kitchen prices you higher or lower than your neighbor who just remodeled their entire kitchen with top-of-the-line appliances and finishes. They don't pay attention to the fact that your house backs up to a greenbelt and is in a quiet part of the neighborhood where another house in your neighborhood backs up to a Walmart loading dock.
There are a TON of variables that go into getting a value and AVM tools simply don't cut it. To compound that issue further, in Texas AVM tools don't have access to sales statistics and a comparable is not a comparable until the property sale concludes.
Do you have a real estate question you'd like answered by a licensed Texas Real Estate Broker?
Email your question to dearbroker@creekstonere.com and we'll get it answered for you.
