Online Home Valuation Service Explained: Discover How Our Digital Property Assessment Operates!
Free Online Property Valuation vs Professional Appraisal: Knowing the Difference
In the realm of property valuation, two primary methods stand out: free online valuations and professional appraisals. While both offer insights into a property's worth, they differ significantly in accuracy and purpose.
Free online property valuations, provided by services such as PlanetHome, offer a general estimate of a property's value. These estimates are based on automated valuation models (AVMs) that consider recent sales data, market trends, location, size, and condition. However, they lack the ability to account for unique home features, recent renovations, or subjective market factors influencing value.
On the other hand, professional appraisals involve a licensed appraiser conducting an in-person inspection, assessing the home's condition, improvements, and comparable sales more precisely. This method provides a more reliable, legally recognized market value, especially necessary when selling, refinancing, or securing a mortgage.
The circumstances that necessitate a professional appraisal include:
- When a mortgage lender requires an accurate and certified property valuation for loan approval.
- During property sales to confirm fair market value and set an asking price.
- For refinancing purposes to validate property worth to the lender.
- In tax assessments or legal matters where an authoritative valuation is required.
- When the property has been significantly modified or has unique features that online tools are unlikely to assess properly.
Free online valuations are useful for quick, initial estimates but lack the depth and certification of a professional appraisal. They are not suitable for cases requiring legally binding or very precise property values, such as property division in divorce or inheritance, or insurance coverage calculations.
The exact location is one of the most important factors in property valuation. The online property valuation service uses the comparison approach, comparing the property with similar ones using a nationwide property database. The valuation model used is based on the average of the remaining six properties, selected after excluding the two cheapest and two most expensive properties from the comparison.
The service is time-flexible, allowing users to calculate property value at any time without prior registration. It's also free for users, with experts possibly contacting users directly in individual cases for a more accurate valuation. Users receive the property valuation result as a detailed PDF promptly, eliminating long waiting times.
Properties that do not fit into standard schemas, like tower apartments or houseboats, may not be catered to by the online property valuation service. The market value in an appraisal may not always be identical to the market value in the online valuation due to factors such as actual property prices and property categorization.
In summary, while free online valuations provide a rough estimate, they lack the depth and certification of a professional appraisal, which is crucial for financial, legal, or transactional decisions. For such cases, it's advisable to opt for a professional appraisal. The online property valuation tool, however, remains a useful tool for quick, initial estimates.
A real-estate investor might find a calculator helpful in determining the initial value of a potential investment property, but that value should later be confirmed with a professional appraisal for a more accurate and legally recognized worth. In cases where the property boasts unique features or significant modifications, a calculator may not provide an accurate reflection of its real-estate value, necessitating a professional appraisal.
