Simply put, a property is worth what a buyer is prepared to pay for it.
When you type in your address in the search bar and hit “send”, real estate and lender websites such as Zillow, use AVM (automated valuation model) to compute the “estimated market value” of your home. ”It is a starting point in determining a home’s value and is not an official appraisal.”, Zillow writes. For these sites, the information provided is a marketing and lead generation ploy.
Experts advise speaking to a local real estate expert (a Realtor) to determine a more accurate valuation. At no cost to you, a Realtor will do a CMA (comparative market analysis), which takes into account current market conditions, the location, the home’s features and compares it to similar properties which are in different stages of the transfer process.
If you have a conventional, conforming loan and would like to determine how much your home has appreciated over time, the FHFA (Federal Housing Finance Agency) HPI (Housing Price Index) calculator https://www.fhfa.gov/DataTools/Tools/Pages/HPI-Calculator.aspx , will assist with this. However, it isn’t adjusted seasonally or for inflation.
Hiring a professional Appraiser, for a fee, will result in an official, comprehensive report.