A variety of websites have emerged in recent years that attempt to estimate what your home is worth. If you intend to sell your home it is important that you understand how these estimates are determined before you use them to set an asking price.
These websites use something called automated valuation models (or “AVMs”)… computer programs designed to make estimates based on averages. Here is the first problem with this approach… Every home isn’t average and computer models don’t know the condition or uniqueness of each home. The other problem is that models used by different websites rarely agree – so which estimate is correct? As a homeowner you’re likely to hope that the highest value is correct. Buyers, on the other hand, want to negotiate based on the lowest the sites suggest.
Determining the right price requires looking at recent sales, seeing what other homes on the market are asking, and understanding exactly how your home compares.
Never make pricing decisions based on a website’s generic analysis. Talk to your REALTOR® and make decisions based on as much information as possible.