Currently there a three methods used to determine the value of a property. Broker Price Opinion (BPO), Comparative Price Analysis (CMA) and an Appraisal. Lenders give the highest credibility to an Appraisal.There is really not much difference between a CMA & BPO, these or done by real estate agents. The form or the format might be different but the information is still the same.
Briefly if you want to gain a quick understanding of the value of your home the main questions asked when finding a value are:
Properties of similar size, age, bedrooms, bathrooms and amenities.
Condition of all properties compared (i.e. deferred maintenance versus well-maintained)
Location of all properties compared ( i.e busy streets versus interior neighborhood locations)
Distance of all properties compared (typically 1 mile unless here are special circumstances)
You are going to need at least three sold properties within the last six months and three active properties for sale to come up with a justified value.
The three methods I mentioned above are going to be the most reliable in determining a value for a piece of property. Are they perfect? No, but you have to realize that agents that prepare poor CMAs & BPOs do not stay in business long or will not be called back for more valuations in the future. Appraisals tied to a loan have some very serious consequences if they are deceiving or incorrect, one being Federal Loan Fraud.
Valuations that come from Internet websites have no performance pressure on them. These valuations are helpful but not reliable. I have yet to see an Internet real estate information provider write an algorithm that can take in all the variables and exclude improper variables to zero in on a value. it still takes a human to look at the data and make the proper adjustments. What many people don't understand is that the computer cannot see inside those houses. Upgrades, lack of upgrades, deferred maintenance and location are items that real estate computer valuation programs have a hard time accounting for. The public record and even MLS systems many times don't provide enough detail. If the detail isn't there for every single piece of property, how can you expect any online website valuation tool to be accurate? You still have to get a body on the property to see and make the proper adjustments.
There was some talk about Zestimates and I like Zestimates. I am not saying that they are particularly accurate but you can use these as a tool. I have several client's properties that are not currently for sale and my own properties set up with value alerts. I get an e-mail from Zillow when Zillow's system perceives a change in value for any of those homes. As a real estate professional I can then look closer at the information and determine what is happening in those areas. I have seen Zillow Zestimates come in right on the money, sometimes high, but many times come in low too.
I posted a video commentary on valuations on my blog