Online Home Estimates - The Full Story

If you’ve been looking into buying or selling a home, you may have stumbled across some online “home appraisal” or “home estimate” sites which can tell you how much your home or the home you’re interested in is evaluated at.

These online tools use a variety of data points to decide on a price point. They look at previous sales in the area as well as current listings. It will look at pictures of the home to see what kind of finishes are within it. It counts the number of bedrooms and bathrooms and the square footage of the home. It also looks into off-market data like tax assessments, prior sales, and any other publicly available records. It will also take into consideration changes in the market.

Sounds pretty robust, right? It’s definitely a cool tool. But there are lots of things that online assessment tools lack, too.

Online estimates miss a lot of what makes up a great home evaluation. These tools may miss recent upgrades that increased the value of a home, and they would also miss any structural issues that may make the home less valuable. The algorithms each tool uses may also overlook the difference between list price and sold price (especially if there are plenty of homes for sale in your area at the moment), or may similarly be unable to make a good estimate if there aren’t many homes for sale near you. If there is outdated information on the internet (which there often is), these things are also impacting the way the algorithm is considering your home or the home you’re looking at.

Typically, these online estimators will state their level of accuracy, and may even be able to explain which areas they are more or less accurate in.

Online estimates can be a valuable tool in getting started in your real estate journey. Most are off by a marginal 2-5%, meaning you can get a rough ballpark of what your home might be worth. That can help you with your planning!

But there are better options out there, if you’re serious about selling.

If you’re looking to sell your home, you’ll want to speak with a real estate agent. An agent can pull more relevant comparables to your home with a trained eye that an algorithm just doesn’t have. Considering specialty upgrades or structural issues they can evaluate how your home stands up to similar homes in the area as well as similar homes in different areas. All of these factors are crucial, as pricing your home just a little too high could be the difference between selling quickly and easily, or not. But just a little too low and you might be selling yourself short!

Bringing on an agent is the best way to ensure your home is priced effectively with the most detailed analysis of the market, the neighbourhood, the upgrades, current sales in the area, and more.