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What is my home value?

Wondering if someone can shed light on home appraisal by the county assessor vs. an appraisal used for a refinance/home sale. Then there are appraisals based on comp sales which don't take into consideration any upgrades or the condition of the inside of the home. Are all these numbers linked to one another, or are they completely independent? And then there is zillow and companies like that that offer home values. These numbers for my home are ALL DIFFERENT. What is the real number?? Thanks for any insight. anon

There is no way to know for sure what that number is without selling your house.

There are, however, any number of ways to get a sense of what that number might be, and different methods may be most appropriate for different purposes. In most cases, a home can be reliably appraised by comparing it to ''comps'' (short for ''comparable sales''), meaning other houses of a similar size, with similar features, located in the same neighborhood, which have been sold within a recent period of time. Because those homes have actually been sold, the ''real number'' is known. To the extent that the appraiser has any information about the interior condition, upgrades, needed maintenance, etc., those things can be taken into account along with any differences in square footage or amenities, and the appraiser basically adds or subtracts a dollar figure for each difference, and then averages the result for several comps to arrive at the estimated value of your house.

Appraisers also use the income method (applying a series of calculations to the amount the property is or could be rented for to obtain the price for which an investor would buy it) and the cost method (adding up what it would cost to build the house, and totaling that with the value of the raw land) but those methods are not the most reliable for owner-occupied existing homes.

A full appraisal based on comps, where the appraiser comes physically into the house, measures all the rooms, makes notes on how attractive your kitchen countertops are and so on, is what you would normally get if you're obtaining a purchase mortgage, and except for certain special circumstances (highly unique properties, development projects) it's considered a pretty good indicator of the ''real'' value as of a particular date. Obtaining that sort of appraisal costs a few hundred dollars.

In some situations -- perhaps a refinance with the same lender -- you might get only a ''desktop'' appraisal or ''automated valuation.'' This is where an appraiser never comes inside your house, although someone might ''drive by'' to confirm that there's a house at the address, it doesn't look abandoned, etc. Instead, it's assumed that your house is comparable to other homes in the same neighborhood with the same basic characteristics as shown in the public records (square footage, number of rooms, etc.) and the analysis is done using that public data. Zillow and other online valuations are done using the same sort of algorithm -- but the exact data and calculations used will be different from one appraiser or website to another, so the numbers won't match up exactly. These appraisals are naturally much cheaper to get (even free, in the case of Zillow), but are likely to be less accurate.

Real estate agents who want to list your home may offer a valuation that is based on their knowlege of local comps and what they see in your home, so in that sense it is similar to a full appraisal -- but they tend to use ''gut feeling'' more than a hired appraiser would, and not so much actual measurements and calculations of differentials and averages. In a market that's changing rapidly, a good realtor might come up with a more accurate number than an appraiser could. Lenders and other interested parties sometimes get this type of valuation and call it a ''broker price opinion.''

Then there's the appraised value for tax assessment purposes. In California, if you've owned your home for very long, this bears almost no relationship whatsoever to the fair market value of the house. With a few exceptions, whenever a property is sold, the assessed value is set to equal the sale price. Thereafter, the value may go up or down each year to match the changes in the overall local market, but with a cap of 2% increase annually -- the maximum allowed under Prop 13 and usually less than the actual increase in market value. The assessed value can also go up if you add on to or otherwise improve your home, by whatever amount the assessor reasonably determines to be the added value of the remodel. Of course in recent years, market values in many places have actually gone down, and when that happens, if you think your assessed value is too high you can ask the county assessor for a reduction -- and you may have to pay for an appraisal to get one.

Hope that helps, with whatever your purposes are. In the Business

Of course you do not want to actually sell your house to learn the fair market value. Each parcel of real estate is unique, even in a development of identical homes, due to location, exposure, lot size, etc.

You may be interested in presenting evidence as to your home's fair market value to get a reduced assessment. If so, the website for the State Board of Equalization has an entire packet to assist you. You will need to find comparable sales within the applicable period of time for your lien date. A real estate agent can help you.

Appraisers and assessors are trained to make adjustments for differences between properties - for size, condition, amenities, age, etc. You may want want to hire an appraiser, but remember, appraisal is more of an art than a science.

Bank appraisals will be on the conservative side, because the lender has learned the downside of overly optimistic appraisals. Hope this helps! Lynn

I believe the value of the home is a subjective thing that realtors and appraisers try to measure as carefully as possible (using comps in the area, mostly, I think), but at the end you are at the mercy of a buyer interested in paying the price you've set and being able to make it to the loan process successfully.

My experience is that zillow seems to provide an overvalue of the value of houses... yahoo real state seems to provide a better, more realist range and ziprealty provides a composite of various internet appraisal sites. EP

1. County Assessor: This person and the county want to establish a value, obviously, for tax revenue, not for selling purposes. This is a paper value only, based on purchase price plus yearly increases, and upgrades to the property (if they're done legally, with permits).

2. Appraisals: An appraisal that is demanded by a lending institution for loan purposes is usually conservative, and is for the purpose of establishing that the loan amount is reasonable and within the risk tolerance of their guidelines (e.g., desired loan to value ratios).

Whoever orders the appraisal (not who pays for it) defines the paramenters and how the numbers are interpreted. In other words, if the lending institution orders it, a conservative appraiser is the likely choice. If a Seller orders one, he or she will tend to find an appraiser who will focus on premium market value.

3. Comp appraisals can have a wide range: They can be weighted by distressed values or retail market values (there is a wholesale distressed - i.e., short sale, bank-owned - industry and value). A comparable retail sale is very different from a comparable foreclosure sale. The key point is that appraisers look at all values, therefore, the result is adjusted somewhere between them. This is one reason why foreclosure sales dampen the numbers on regular sales.

4. Zillow and the like: These services - based on algorithms - are an attempt at determining retail market value. They're not true value and are good for quick overviews only - broad spectrum. Do not base any decisions or conclusions on a Zillow result. It's an exaggerated retail focus. Professional institutions (e.g., lenders) use a service called ''LPS'' that uses sophisticated algorhithms and more comprehensive data, that can predict NPV (net present value) and the current reality of the market to the institutions. Zillow = hyped, retail value (usually); LPS = conservative, wholesale value: Your property's number is somewhere in the middle.

What is the real number? Your home is worth whatever someone will pay for it! The only way to come up with a real number is to look at each property individually and do a comparative market analysis, including location, amenities, upgrades, and conditions. Jessica

2008 - 2011 Reviews

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I need my house appraised, for tax reasons, and don't know exactly how to find an appraiser who is reasonably priced, experienced, and accurate. The California Office of Real Estate Appraisers has no links for finding one, although you can look up appraisers once you have some names. Does anyone have recommendations for finding a good real estate appraiser? Thanks very much!

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2007 & Earlier

I need to get my house appraised... does anyone have an appraiser that *they've used* and would recommend? Thanks! Anon