Price Your Home Like an Agent Would

Today Redfin launched the Home Value Tool, a new online feature that helps homeowners estimate the value of their home. The tool is the vastly improved version of the home price estimator we introduced in March of last year, which helped grow the listing business by 120% in 2012. The Home Value Tool looks better, flows better, and uses the most up-to-the-minute real estate data out there. It’s the best way to price your home online because it prices your home the way an agent would.

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We started working on the Home Value Tool when we realized that in real estate, there’s no magic formula or complicated algorithm listing agents use to figure out how much your home is worth. Instead, they create a list of every home in your neighborhood that sold in the last several months, grab a big red marker, and emphatically start crossing homes out until they’ve got a list of the four or five that are most like yours. Then they make some small adjustments, take an average, and give you a price.

Agents work this way because they know more about the homes in your neighborhood than just their square footage or number of beds and bathrooms. They’ve seen these homes inside and out, so they can say that a recently sold ranch-style house with a view of the river is similar to yours and that the house down the street, which looks just like yours on the outside but has an outdated 1960’s interior, isn’t. Their local knowledge gives them the edge over any algorithm for pricing a home.

Agents aren’t the only ones with a local edge. Homeowners have one too. Probably not as much as agents do, but certainly way more than a number crunching computer hundreds of miles away. That’s why we made the Home Value Tool more than a black box that spits out a number. We built it to take advantage of what homeowners know about where they live. Here’s how it works.

The Home Value Tool takes your address and shows you a list of homes recently sold in your neighborhood based on the most up-to-date real estate data available. Then you look through those homes and choose the three most like your own based on what you know about your neighborhood and stats like square footage and the number of beds and baths. When you’re done, we show you an estimate of your home’s value, a map of all the homes used to create the estimate, and a chart that lets you compare them all to each other.

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And if you want a real estate agent’s opinion of your estimate, we’ve included a button to contact a Redfin Agent in your area.

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Click here to take Redfin’s new Home Value Tool for a spin. Or if you’re feeling a little like some fun, use it to price Carmelo Anthony’s mini-Versailles, Kim and Kanye’s iberian palace, or Channing Tatum’s tropical bungalow.

Discussion

  • http://twitter.com/MYCHBO MYCHBO.com

    Thanks for the new Real Estate tool – It is always amazing to me how many real estate owners have no idea what the true value of their real estate is

  • http://www.aaronfyke.com Aaron Fyke

    Are you guys going to track the variance from the predicted value and the actual selling price? It would be good to see that variance over time to provide confidence bands. The biggest problem I see with any prior method (including home “appraisers”) is that the confidence bands are something like +/- 10%, which is bordering on useless. It would be interesting to know if, given enough data, and the knowledge of recent purchasing history, those bands could be narrowed to a 5% spread (ie, +/- 2.5%). That would be pegging a $700k home within $35k of the actual sales price. That would be something.

  • BKI

    Last Wednesday (5/1/13) I looked up my homes value and got
    the following:
    Low: $467k
    Avg: $559k
    High: $650k

    I also noted that the criteria used to determine that was comps that have sold in the last 3 months, are within 15% in size, and under 0.5 miles away and that you
    can use filters to change this criteria (though I did not change it).

    Now when I look at my saved estimate on my own page it still shows the same low and high ($467k & $650k) but when I click on the link it gives me the following:
    Minimum: $440k
    Current Estimate: $500k
    Maximum: $555k

    This is a $59k drop (>10%) based on the new valuation method. Was the old method that overvalued even in a rising market?