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How To E-Appraise Your Property


Until recently, figuring out your home's value was not something you could do from home. You had to scan the microfiche or even thumb through dusty tomes at the local library or tax assessor's office. If that didn't work, you had to hire an appraiser to make an estimate or, worse, call in a real estate agent to get a competitive market analysis -- which also meant you would have to endure a sales pitch.

The Internet gives you new options. Plenty of Web-based services comb public data to help you figure out how much your home is worth. What's more, many sites are free. But depending on where you live and the kind of home you have, they can be on target -- or way off base. Some homeowners will ultimately need an agent or appraiser.

BusinessWeek tested 10 home-valuation Web sites, using properties in California, Ohio, New Jersey, Texas, and Virginia. Don't waste your time with sites such as Homescape.com and Free-Home-Evaluations.com, which just forward your name and address to a local real estate agent. You want sites that provide an automatic valuation.

Although the databases are often similar, it's worthwhile to check out several services, since they use different algorithms and models. For example, Valueyourhome.com, a fee-based site operated by Fidelity National Financial (FNF), gave an estimate of $491,000 for a 40-year-old, four-bedroom home in northern Virginia, while Bank of America's (BAC) free site reported a value of $420,000 to $456,000. "The ranges are huge," says Ben Joslin, vice-president for marketing at Domania, which operates several free Web-based valuation services, including Home Price Check and Value Check. His advice: Pick five similar homes in your neighborhood and then go online with each address to get their valuation. Then you can make an estimate by comparing your home with your neighbors'.

Keep in mind that these automated valuation models work best in areas where the housing stock is very similar, such as developments built within the past five years. In older neighborhoods where homes are more likely to have undergone renovations or improvements, such as a pool or tennis court, the sites aren't as accurate. We had a tough time getting a value on a 100-year-old farmhouse in Lima, Ohio, because of a lack of data. The only estimate ($126,000), which came from Electronicappraiser.com for a $29.95 fee, seemed low.

Another big caveat: The data, which typically come from county clerk and recorder's offices or property assessors, can be out of date. While researching a condominium in Los Angeles, the most recent comparable data available on Homegain.com were from December, 2002. "Public records aren't always efficient," says Bradley Inman, founder of Homegain.

The most frustrating search was trying to find out information on a new 4,000-square-foot home in a Dallas suburb. Texas is a nondisclosure state, which means it doesn't have to make public certain data, such as a property's sale price. Only Bank of America and ditech.com's sites had good data. They make estimates based on mortgage loans.

If you live in a state where there's a dearth of data or if you are challenging a tax assessment, it's probably worth spending from $200 to $500 for an appraisal. The Appraisal Institute (appraisalinstitute.org) has more than 18,000 members. Ask how long an appraiser has been practicing in your area and get three recent client references, says Diana Jacob, an independent appraiser in Baton Rouge, La. Appraisers are state-regulated, so you'll have to find the right agency to determine whether the appraiser has ever been disciplined.

Of course, nothing beats the ease of sleuthing online. Even Gary Taylor, an appraiser and president of the Appraisal Institute, logs on to Homegain.com every few months to keep tabs on the value of his Long Island (N.Y.) home.

By Lauren Young


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