Here’s a brief rundown of why market value is the only value that matters.
There are tons of people out there who are buying or selling for the first time, and they tend to routinely confuse terms pertaining to home values. Today, we’re shedding some light on this subject by taking a deeper look at the three common values: market value, Zestimate, and assessed value. These terms are far from interchangeable, and in fact, only one of them should be trusted when it comes to pricing your home:
1. Market value. This is how much your home is worth on the current market and the most probable price that a given property will bring in an open market transaction. In even simpler terms, it’s the price that a buyer is willing to pay for the home and that the seller is willing to accept. When a local agent comes out to your home to conduct a CMA, this is the value they’ll give you.
2. Zestimate. This is simply Zillow’s estimate of a home’s market value, and you’ll want to stay away from it as much as possible. (We’ll explain why that is shortly).
3. Assessed value. Typically based on a percent of the appraised value, the assessed value is what you’ll be paying property taxes on for the home.
Of the three values, market value is the most trustworthy, and that’s because an experienced local agent will actually take all the features of your home into account when calculating it. Zestimates and other online valuation tools aren’t accurate because they’ve never stepped foot in your home, let alone your neighborhood, and therefore don’t know much of anything about the specifics of its surroundings. They’re just algorithms that rely heavily upon public and user-submitted data.
In fact, on Zillow’s website, you can actually find this disclosure: “Zillow is not an appraisal, and it should only be used as a starting point. We encourage buyers, sellers, and homeowners to supplement Zestimates with other research such as visiting the home, getting a professional appraisal of the home, or requesting a CMA from a local real estate agent.” So there you have it: Zillow’s algorithm is handy, but hardly definitive.
When pricing your home, trust a pro. Even in a hot seller’s market, failing to properly price your home from the start is a great way to doom your sale. If you have any questions about either of these three home value terms, give us a call or send an email. We’re always here and ready to help!