Several factors affect the reliability of your valuation:
- How close is your home's value to the value in your area? Notice there are two lines on the graph - a trend line for your home and a trend line for your ZIP code. The greater the margin between your home's value and the average value for the ZIP code, the more unreliable the prediction.
- Is you neighborhood homogeneous or heterogeneous? Two big words for a basic concept - are the homes in your neighborhood cookie-cutter (homogeneous) or unique (heterogeneous)? A neighborhood with homes of similar age and construction are easy to price because the standard deviation around the mean is low. A historic neighborhood of small and big homes of various condition and age is tough to price because the standard deviation around average home value is high.
- How recently did your home sell? You can't beat fresh data; the more recent the sale of your home, the more precise this measure of value.
This metric ranks the precision of its estimate on a scale of one to five stars - more stars, the more confident you can be about the value generated. Conversely, homes with fewer stars are more difficult to price - this is where the services of a real estate agent are invaluable.
Skilled real estate agents move beyond this blind estimate because they are familiar with the market. This is why this tool is only a first pass. To rely on it exclusively can lead to overpricing and a house that languishes on the market or, worse, a house priced too low leaving money on the table.
Ready to sell? Call a Barnett & Hill agent to begin pricing your home to get it sold.