What is Your Property REALLY Worth?
Where do you find the correct information?
There are several options for finding out the value of your property but the results can be very different. It is important to know which option is providing you with accurate information.
Zillow and other similar online programs provide estimates of value. Zillow estimates are called “Zestimates.” Algorithms that use various public information sources calculate these estimates of value. While they can be correct, especially if the property was sold recently, the numbers are often wrong. They do not consider the condition or special features of the property. Also, the sales information they use is sometimes very old. The values given by Zillow are not reliable enough to be used to obtain financing but can give you a ballpark number.
The Honolulu City and County’s yearly tax assessment can also provide an estimate of your property’s value but it also has problems. For example, the tax assessor may not know that your property has a better view than other properties that have sold recently. They also make no adjustment for a leasehold property versus a fee simple property. In these examples, the difference can be substantial and the taxpayer is paying property taxes based on the assessment. About 1,300 to 1,700 homeowners appeal their property tax assessment every year.
A real estate agent can provide a Broker Price Opinion, or a Comparative Market Analysis (CMA). These tend to be more accurate than tax assessments or online websites because the agent has access to the most recent sold data and knows more about the area and potential buyer preferences. It is important to select an agent that is familiar with the neighborhood and allow them access to the property to improve the reliability of the value provided.
While these options can provide you with some information, there is no substitute for an appraisal by a Hawaii-licensed and certified appraiser. An appraisal can cost between $550 and $800 for a typical single-family home. It is usually required by the lender to obtain a loan to purchase a home or to refinance an existing property. Sometimes a homeowner will have an appraisal done prior to listing for sale if it is an unusual property with special conditions or there are no comparable sales in recent history.
