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When it comes to tracking our personal finances, one of the hardest things to estimate is the value of our home. My wife and I know what we paid for our home just over 10 years ago. We also know the terms of our mortgage … 30 year fixed rate loan at 4.375%. But estimating the value (10+ years after purchase) can be a bit difficult.
Why would we even care the value of our home? Well for one thing … we have been using it in our net worth calculations for years.
Some people don’t believe in using the value of their home in net worth calculations … and that’s okay. But we believe in taking the estimated value of our home (what we think we could sell it for) and subtracting it from our outstanding mortgage balance.
At last check, the estimated equity in our home is between $150,000 to $170,000. That is significant enough of a number to pay attention and track it.
We are also considering selling our home in the next couple of years … in order to downsize to a smaller and more optimized home. So that is a second reason why we are interested in an approximate value of our home. We want to know how much we could potentially sell it for so that we could get a cost benefit analysis on selling the property.
Other home owners may be interested in knowing the estimated value of their home to see if it would make a good rental property. This is something we are considering in our analysis of selling, keeping, or even renting our current home.
We don’t need to have an exact number … but it is good to have a ballpark value of our home.
How to Estimate the Value of Our Home
There are many different ways to estimate the value of your home.
For example, you could look around your neighborhood and see what similar houses are selling for in your area. This isn’t necessarily an exact science, but could at least give you an idea.
You could also start calling real estate agents to get feedback on what your home could potentially be listed for. They should have an idea of the current real estate market conditions in your area.
There are also many online tools that you could leverage to estimate the value of your home.
Today, we would like to share and discuss 5 popular websites that can help estimate your home value. We will use our current home as a test case to see the different estimates across each of the online tools.
5 Popular Websites to Help Estimate Your Home Value
Before we discuss each of these websites in more detail, let’s look at the property features of the home we are currently living in.
We have owned our home for just over 11 years now. The house is a 2-story with 6 bedrooms and 2.5 baths that is 3,362 square feet.
Unfortunately, we bought more house than we needed and although we have no problem making our mortgage payments … we could have saved a ton of money from buying a smaller home.
So instead of focusing on the past and what we can’t change … we are now focused on downsizing our house … despite having 3 kids. We have estimated we could drop at least 1,000 square feet from our home and still live comfortably.
Our goal in the next 1 to 3 years is to work at getting our home updated (new roof, painting, fixing windows, etc.) and then putting it up for sale.
Then we would like to downsize to a smaller home and hopefully save some monthly cash flow in the process.
One of the first steps will be to get an estimate of our current home value.
We have highlighted 5 popular websites that can help us estimate the value of our home.
For that past 4 years, we have used Zillow to get our estimated home value.
This is the number that Personal Capital uses in it’s net worth estimates and is also the tool we use in our monthly net worth reports.
Overall, it’s helped us understand the fluctuations in the real estate market in our area over the past 3 to 4 years. But we have to remember it is just an estimate.
Personally, I have been saying for a while now that I believe the Zillow estimate (at least for our home) is too high. And after running the estimates from the other tools listed below … I have confirmed my suspicions.
The Zillow estimate came out the highest of all the tools we looked at.
Zillow Home Value Estimate for Our Home = $344,091
Another popular online tool for finding homes for sale, rentals, and even a place to estimate your home value is Trulia.
We haven’t had much experience in using Trulia, other than looking for what houses rent for in our neighborhood and town. Remember, one of our options for our current home (which we discussed earlier) would be to rent it out.
So we have used this website as a way to see what rental property managers are getting in our area. And we are seeing what types of utilities are included in the current rents of these homes.
All of this information can be used later when we make our decision to – rent, sell, or stay in our current home.
When it came to getting a home value estimate, Trulia came in just under our Zillow estimate … which my gut says is too high.
Trulia Home Value Estimate for Our Home = $341,870
I’ve had very little experience using Redfin up until now, but have heard great things about the company … especially when it comes to listing a home. They are supposed to have much lower listing fee’s compared to traditional real estate agents.
For the purposes of this exercise though, we are not interested (at least yet) in listing our home for sale. But we are interested in getting an estimated home value. And Redfin has it’s own tool to do that.
After plugging in our home details, we got an estimated value much less than the other tools used. And I can honestly say that this estimate feels the best to me based on gut feeling.
Redfin Home Value Estimate for Our Home = $328,667
4. Chase Home Value Estimator
Another option for getting your home value estimate online is through Chase bank, which was a bit of a surprise to me. I’ve been a fan of earning travel rewards through Chase credit cards … but never realized they have a home value estimator tool
After plugging our details into the Chase Home Value Estimator, the results were within the range of our high and low estimates.
I still believe the Redfin Home Value was the more accurate estimate so far.
Chase Home Value Estimator = $337,000
The final online tool I will mention is the Realtor.com home value estimator. We’ve used the Realtor.com website on a few occasions to look search for homes for sale in our area.
But other than that, we have never used the home estimate tool. Considering that Realtor.com is a reputable site, the tool should be worth mentioning.
Just like with the Chase Estimator, the Realtor.com estimate came in right around the middle.
And just like with the other tools, I think it is a bit high.
Realtor.com Home Value Estimate for Our Home = $339,200
Calculating Home Value Estimate as an Average
We’ve been wanting to tweak how we estimate our home value for our monthly net worth reports for several months now. Instead of just using one estimating tool, we’d like to leverage several tools to get a better average.
So we now plan to start taking an average of all these websites to calculate our home value estimate each month. As I stated earlier, we have been using Zillow for some time now … but I feel it is estimating our home value on the high side.
I think taking the average of these 5 websites gives us a much better home value estimate.
- Zillow – $344,091
- Trulia – $341,870
- Redfin – $328,667
- Chase – $337,000
- Realtor.com – $339,200
Average Home Value Estimate = $338,165
After averaging out all of the home value estimates, we have an average of $338,165. This is the number we will start using now on our monthly net worth reports.
I also believe this is a good place to start listing our house at … if we were to put it on the market. And with my gut feeling being the Redfin estimate … we would probably make that ($328,667) our low end if a buyer wanted to negotiate the price down.
The True Value of Your Home
Keep in mind that all of the tools we listed above only give you an estimate of your home value. Just like with any asset, a home is only worth the amount that someone else is willing to pay for it.
For example, if we think our home is worth $330,000 and try to sell it, but our highest offer from a buyer $300,000 … then our home for the time being is really only worth the $300K.
No matter what the online tools say.
I know for a fact that our home doesn’t have custom cabinets in the kitchen or granite countertops. I also know our home needs a new roof (which we will be getting soon).
We have an in-ground pool … this could be good or bad when it comes to selling our home.
The online tools we highlighted don’t have any of this data. So I could make the argument our home is not worth those estimates, because our kitchen would possibly need to be remodeled by a new home owner.
These are just a few of the other factors that will go into figuring out our true value of our home. The websites and home value estimator tools can be helpful … but are not a guarantee of what you could expect to sell your home for.
How do you estimate the value of your home? Do you use any of these online websites or other methods?