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Today, online home appraisals have a median error rate of around 2% for listed homes and 7% for off-market properties. Still, for homeowners who want a free, fairly reliable appraisal in minutes, online value estimators are a no-brainer. The best way to value your home is to check and compare the sold prices of similar homes around you. Property type, square footage, age, location, renovations, and much more can impact your home's market price.
When you’re buying a home and are under contract, the appraisal will be one of the first steps in the closing process. If the appraisal comes in at or above the contract price, the transaction proceeds as planned. If the appraisal comes in below the contract price, it can delay or derail the transaction. According to the Appraisal Institute, an association of professional real estate appraisers, a qualified appraiser should be licensed or certified—as required in all 50 states—and be familiar with the local area. Per federal regulations, the appraiser must be impartial and have no direct or indirect interest in the transaction.
How does a home appraisal work?
Some homeowners refinance to “cash out” a portion of their home equity and reallocate the funds toward a home improvement project or renovation. You can also compare your home to similar homes recently sold in your market to get a rough estimate of what your home might sell for. Finally, you can hire a professional appraiser to personally estimate the value of your home. Even though the lender orders the appraisal, it’s the buyer’s responsibility to pay for it.
Getting an appraisal is a required step when giving a home to a family member as a gift of equity. You can also try presenting a factual case for a higher valuation to the original appraiser. The borrower usually pays the appraisal fee, which averages $300 to $450. As the persistent high inflation hits Americans at the gas pump and in the grocery store, rising home values have been a silver lining for the nation’s homeowners.
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A home appraisal allows the buyer and seller or refinancers to understand the fair market value of their property. If it is in line with expectations, then the transaction can move forward to the mortgage underwriting process — and, hopefully, a successful closing. Home appraisal and valuation sites that offer “free” or “instant” services are a dime a dozen on the internet.
Rafeh, who works with 73% more single-family homes than her peers, shares that many real estate agents will provide homeowners with a free appraisal in hopes of gaining their business. When used colloquially, an appraisal may simply refer to a home value estimate generated by an algorithm or a real estate professional. Homeowners usually seek out appraisals and home value estimates to determine how much equity they’ve built or what they could sell their home for in the current market. The assessed value of residential properties is usually based on the estimated market value of the property.
How long does an appraisal take?
Like Jamison, Hanna has also worked with sellers who wanted to base their listing on a price generated by an AVM, and he has to explain to them that most of the time, it’s not doable. When you plug in the property information for a free home appraisal, the data is calculated by the specific algorithm created by that particular site. That’s why you might see slightly (or sometimes more than slightly!) different home valuations on different platforms — and those values can change quickly, sometimes in as little as one day. With insight from top Los Angeles real estate agent, Rima Rafeh, we’ll walk you through your free home value estimate options.
Appraisals can take up to several weeks to complete, though not necessarily because of the time it takes to perform a single, on-site appraisal of the home. Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Follow the prompts on HomeGain’s homepage to find your home value estimate, and eventually, you’ll be asked to input contact information for someone to reach out to you. The interface is nice, but you won’t get immediate results with this one.
Option 2: Ask a real estate agent for a free home appraisal
A full appraisal is also going to be required by mortgage lenders because it tends to be the most accurate way to verify that they aren’t loaning out more money than the house is actually worth. Jamison says clients are often confused by automated valuations, and it is up to their agent to explain why using the number they see online isn’t necessarily the best way to set a sales price. Get free, objective, performance-based recommendations for top real estate agents in your area. "Our mission at WOWA.ca is to empower Canadians by providing accurate and intuitive financial tools & guides, along with market reports, so that everyone can make more informed financial decisions." Get a free instant home value estimate with the WOWA Home Value Estimator. Backed by a state-of-the-art algorithm and hundreds of thousands of data points, we can provide a market price estimate for more than 90% of residential properties in Canada.
While an online appraisal generates a quick automated calculation based on various algorithms, a real-time appraisal conducted by a licensed professional is much more involved. In technical terms, a home appraisal involves hiring a professional certified by your state to conduct a comprehensive inspection of your property to assess its value. Mortgage lenders require an official appraisal to ensure they’re not lending a buyer or homeowner more than the property is worth. Like a car, a collectible, or anything else you decide to purchase that has value and could potentially be sold at a later date, a home is an investment. Knowing its value is important, no matter whether you plan on living in it for a long time or selling it down the road and moving somewhere else. Our experts have been helping you master your money for over four decades.
The home needs to appraise at or above the amount you want to refinance for your loan to be approved. The home's amenities, including the number of bedrooms and bathrooms, the floor plan's functionality, and the square footage are also key factors. In addition to Investopedia, she has written for Forbes Advisor, The Motley Fool, Credible, and Insider and is the managing editor of an economics journal. Sure, some of the homes in your area may seem similar, but is your home more modern? These things make a difference and can get your home a higher appraisal. No internet website would be able to distinguish between a totally dilapidated home that sold and your home that has been taken care of.
For an accurate estimate, however, you would still be better off with a free no-obligation consultation with a real estate agent. You may be able to find homes in your neighborhood that are listed for sale on websites like Realtor.ca or Condos.ca. The asking price of these listings can give you a good picture of roughly how properties are valued in your area. However, it can be tough to find a property that's exactly the same as yours and even then, the asking price may not represent the real sold prices in the area. This is especially true in the Greater Toronto Area where some home sellers list their homes for lower prices in order to encourage bidding wars. In addition, some homes may be overpriced and could have stayed on the market for a long time.
It will take the appraiser an average of seven to 10 days to look at the property, complete the research process, prepare the appraisal report and deliver it. If a bad appraisal is standing between you and your home purchase or sale, consider getting a second opinion by bringing in another appraiser. Appraisers can make mistakes or have imperfect information, and appraisals can be affected by bias. An appraisal typically costs several hundred dollars, although the fee can vary depending on the size and condition of the property and the level of detail required. Lenders want to make sure that homeowners are not overborrowing because the home serves as collateral for the mortgage. If the borrower should default on the mortgage and go into foreclosure, the lender will sell the home to recoup the money it lent.
Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Literally just type in your address and get a review including a sliding scale for market value as well as a list of neighborhood comps. While this might seem strange, Chase Bank has their own home property value tool offered for free online.
