Who needs a home appraisal when we have Zillow? You do

My husband and I, like many other homeowners, frequently play the “what do you think our house is worth?” game. We’re not selling our house, so the question is moot, but we’re still playing. We occasionally look at Zillow. He has faith in Zillow. I believe it is incorrect.

“Zillow doesn’t know what improvements we’ve made,” I say to him. “The landscaping we put in, the new roof, the new air-conditioning system, the hardwood floors, the remodeled kitchen and bathroom.”

“No,” said the man, “but Zillow assumes we’re maintaining and updating.”

We put our assumptions to the test this week. We were making financial plans. I suggested that we get a home appraisal to avoid guessing.

I was out of town on the day the appraiser arrived, so I had to leave everything to DC and the two dogs. (Make a 10% deduction.) I would have had the dogs in play care and the house sparkling if I had been home. I would have served hot tea and warm banana bread. I would have waxed lyrical about all of the house’s features. DC pointed out a few improvements before letting the appraiser have the run of the place.

I opened the email with one eye closed when the report arrived. DC was texted. “I just finished reading it,” he explained. “I’m pleased.”

“Me, too,” I added. Not only because the appraisal was 25% higher than Zillow’s value, but also because the number I wrote down was exact.

However, the entire exercise made me consider the arbitrary nature of home values, how much we can influence them, the role of real estate websites such as Zillow, Realtor.com, and Redfin, and when and why we need professional appraisals. I contacted real estate appraiser Richard Allen of Port Orange, Fla., who has been appraising homes for 45 years and was not involved in our appraisal, for answers.

“Homeowners seek appraisals for many reasons beyond just when they buy, sell or refinance a home,” Allen said. “Some people get appraisals for estate planning or, like you, for financial planning.” In addition, we are called in for foreclosures and divorces. Some customers are simply curious.”

Naturally, I had more inquiries:

Q. What is the distinction between what you do and what Zillow does?

A. Websites such as Zillow extract data and generate an appraisal based on the original purchase price, square footage, number of bedrooms, and nearby home sales. Appraisers use the same hard data, but they also consider a number of subjective factors.

We put ourselves in the shoes of the buyers and consider what will appeal to them. We examine market buyer and seller movement to determine the price that a prudent buyer and prudent seller would agree to when neither is under duress.

Q. What can homeowners do to increase the appraised value of their home?

A. Anything a homeowner can do to make their home more modern will increase its value. Kitchens are enormous. If your house is over 20 years old and still has the original kitchen, this could be detrimental. The next most important thing is to have updated bathrooms.

Maintenance that is neglected will also count against you. Repair cracks, wood rot, and ensure that doors and windows open and close properly. Check that the heating and air conditioning, plumbing, and electrical systems are in good working order, that the roofs are sound, and that any water damage is repaired.

Curb appeal and landscaping are also important. Check to see if any structural additions have been properly permitted.

Q. What factors influence the value of your home that you cannot change?

A. The location. You can’t fix a house that faces a power plant or a landfill, or is near a train station or airport.

Q. How do you strike a balance between being helpful and annoying when working with an appraiser?

Q. Does the interior design of a home matter?

A. While a well-decorated home will speed up the sale, furniture will not increase market value. That being said, if I walk into a house that is filthy and neglected, I will take a closer look because it will plant the seed that the owners aren’t very conscientious.

Q. What if the homeowner disputes your valuation?

A. I’ll always say, “Show me what I’m missing.” If they return with viable data, I will reconsider the value. They can also request another appraisal.

Alternatively, return to Zillow.

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