Home value estimations

Home value estimations (HVE) are automated reports using complex algorithms and public records to estimate your home’s market value. They’re user-friendly, usually requiring only an address and other simple information. And, depending on the depth of your research and how quickly you want the report, they are usually inexpensive or even free. But an HVE is not a direct substitute for a CMA.

First, while CMAs and HVEs have similar outputs, they have different inputs. A CMA is based on your agent’s expertise as well as recent sales figures for similar houses in your area. An HVE also uses sales stats but because it relies on public databases, it may be using slightly different numbers.

An HVE may provide data that is not included in the CMA from your agent. Depending on which company you get it from, the report could include information about the property, a description of comparable houses, its tax value and community features such as demographics and price trends.

There’s also an advantage in the fact that the HVE is an objective analysis,. While not perfect, it can help you determine whether the house is worth the asking price.

The HVE does have drawbacks. The public records used may be inaccurate or incomplete. And because an HVE is automated, the report doesn’t take into account your home’s physical features or its marketability. Things like upgrades that would increase your home’s value or excess deterioration that would decrease it are not part of the HVE evaluation. This is where your REALTOR®’s expertise is a major asset.

The good news is that you don’t have to choose one or the other. Since both are either free or inexpensive, you can get both a CMA and an HVE. If the results are drastically different, talk to your real estate agent about how he or she came up with the figure.

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