If you’ve ever searched for a home to buy online, or looked into selling your own home, you’ve no doubt run across popular real estate websites that feature estimating tools to try and figure home values. There’s nothing wrong with using these as a jumping off point, but they tend to be fairly inaccurate for purposes of actually setting a price or making an offer.
These tools typically use comparisons to recent home sales in the area, as well as specific information about your house – square footage, features, and lot size. Some sites, however, use just the address in order to make the estimate.
So what can throw these calculators off? A number of issues – there’s really no way for the tool to know whether improvements have been made inside the home, or if the property has added features like a killer view. These factors can greatly alter home values, rendering these tools inaccurate for purposes of getting a true picture of a property’s worth.
You might wonder how much of a disadvantage these inaccuracies can be. If you’re searching for a home to buy, an estimate that’s way off could deter you from looking at a property that’s actually in your price range. If you’re thinking about selling, going off a website estimate can prompt you to set your price too low or too high. While online tools can serve as a great starting point, you should take their assessment of your home value with a grain of salt.
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