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Tutorial: How to Use Online Property Valuation Tools as a Starting Point

Online property valuation tools offer a quick and easy way to get an estimate of your home’s value. While not as accurate as an appraisal, they can serve as a good starting point in determining your home’s current market value. This tutorial explains how to use these tools and interpret the estimates.

Overview of Online Valuation Tools

Websites like Zillow, Redfin and have automated valuation models that estimate property values. You simply enter your address and property details like beds, baths, square footage etc. The tools analyse comparable sales and make calculations to provide an estimated value range.

Some key advantages of these tools:

  • Convenience
  • Ease of use
  • Cost

However, the estimates may not be completely accurate and should not replace an appraisal.

Step-by-Step Guide to Using Online Tools

  1. Visit valuation sites like Zillow, Redfin, Realtor etc. We’ll use Zillow in this example.
  2. Enter property address. Make sure to input the exact address.
  3. Select details like beds, baths, home size, lot size, year built etc. Be as accurate as possible.
  4. View valuation results. The Zestimate range displays instantly. Scroll down to see value history and comparable sales.
  5. Refine details if needed. You can update any inaccurate facts which may improve the estimate.
  6. Request analysis report. Zillow offers more detailed “Zestimate Forecast” reports for a small fee.

Interpreting the Estimated Value

A few things to keep in mind when looking at online valuation estimates:

  • Results are estimates only, not definitive appraisals. Take it as a starting point.
  • The value range indicates high and low extremes. Focus on the lower end.
  • Check if the estimate is based on enough comps in your area. More is better.
  • Trend the value over past years. Steady growth is good. Big jumps may indicate inaccurate data.
  • Comps may miss key home features that impact value. Adjust if needed.
  • Use it as a ballpark figure and confirm with real estate agents or appraisers.

When to Use Caution

These tools work best for common suburban-style single family homes. Use caution for:

  • Unique luxury homes
  • Custom or unconventional homes
  • New constructions
  • Rural areas
  • Radical local market shifts

Next Steps After Getting Estimate

Once you have a ballpark figure from the online tools:

  • Verify details used are 100% accurate, especially for specialised properties.
  • Drive around the neighbourhood to spot visual comps yourself.
  • Compare your home’s features to the online tool’s comparable sales.
  • Consult real estate agents to get a comparative market analysis (CMA).
  • If selling soon, get an appraisal to confirm true market value.
  • Monitor the online estimate regularly to spot trends.

So use these instant home value estimators as a helpful starting point, but follow up with more research before relying solely on their accuracy.