How a Free Home Appraisal Works
Looking to get a free online home appraisal? Whether you’re thinking about selling soon, considering a home equity line of credit, or just plain curious, your home value is an important part of your overall financial picture.
Many bank, lender, and real estate websites provide online home value estimator tools (also known as AVMs or automated valuation models), which are convenient to use. While the results of these tools can be limited in accuracy, sometimes you don’t want (or need) to pay up to $500 when you’re just in planning mode or satisfying curiosity.
Whether you plan to remodel the kitchen, are on the fence about whether to sell your house now or wait, or are simply interested in getting an estimate of value, let’s take a look at where to get a free home appraisal and the degree to which these tools are helpful.
Why home value matters
For many, a home is not only a place to live but also the most valuable asset on their household balance sheet.
Understanding your home’s value when you’re selling will help you when setting list price, assessing offers, and ultimately achieving a successful sale. With an accurate valuation, you can confidently counter or accept offers, knowing that you’re making an informed decision that aligns with your property’s worth. Home value may also impact a buyer’s financing options, as lenders use appraisals to assess the risk associated with providing a mortgage for the property.
Understanding your home’s value can help you plan for your future, as it often represents a significant portion of your net worth. The proceeds from your home sale may fund your next home purchase, retirement, or other financial goals.
Reasons to get a free home appraisal
A free home appraisal — which is not actually an appraisal but an online home value estimate — can’t replace the opinion of a professional appraiser and is unlikely to be as accurate as a real estate agent’s comparative market analysis (CMA). However, checking your home value online can be helpful in a variety of scenarios:
You’re looking to sell soon
People thinking about listing their home in the near future may use a home value estimator as a starting point. If it’s been five, 10, or 15 years since you purchased, you may be unfamiliar with current trends and need to get re-oriented with the market. An estimate of value can also help you run some back-of-the-napkin math on your potential net proceeds from the sale after accounting for your outstanding mortgage balance and the fees associated with selling.
You’re on the brink of 20% equity
Generally, you can request to cancel PMI (private mortgage insurance) when you reach at least 20% equity in your home. An online estimate can give you an idea of whether you’re within striking distance and if it’s time to contact your loan servicer about whether you qualify. Keep in mind that your eligibility will also depend on factors like how much you still owe on the loan and your payment history.
