If you’re trying to determine what your Florida home is worth, you may come across several different kinds of valuations. Two of the most common are an online home value estimate and a home appraisal.
They are not the same thing.
An online home value estimate is designed to give you a convenient indication of what a property may be worth based on available property and market information. An appraisal is a separate valuation performed by an appraiser and may be required for purposes such as mortgage lending.
For many homeowners, the easiest place to begin is with an estimate. You can check your Florida home value with Easy Realty and then decide whether you need a more detailed form of valuation for what you’re trying to accomplish.
What Is an Online Home Value Estimate?
An online home value estimate provides an automated indication of a property’s potential value.
The appeal is straightforward: you can enter a property address and receive an estimate without arranging an inspection or waiting for someone to prepare a report.
That makes online estimates particularly useful when you’re:
- Curious about what your property may be worth
- Beginning to consider selling
- Monitoring the value of a property you own
- Planning a future move
- Evaluating a real estate investment
- Looking for a starting point before researching the local market more closely
However, an online estimate is still an estimate. It should not automatically be interpreted as the amount your home would sell for or the amount an appraiser would conclude.
For more on the limitations and usefulness of automated valuations, read How Accurate Are Online Home Value Estimates in Florida?.
What Is a Home Appraisal?
A home appraisal is a property valuation performed by an appraiser.
Unlike an instant online estimate, an appraisal is prepared for a specific valuation purpose. An appraisal may be required in connection with mortgage lending and other circumstances where a formal opinion of property value is needed.
An appraisal and an automated estimate therefore serve different purposes.
A homeowner who simply wants to know approximately what a property may be worth will not necessarily need an appraisal just to satisfy that curiosity. A homeowner involved in a transaction or financial process where a formal appraisal is required is dealing with a different situation.
Home Appraisal vs. Home Value Estimate
The easiest way to understand the difference is to look at what each valuation is designed to do.
Online Home Value Estimate
- Provides an automated estimate of potential property value
- Uses available property and market information
- Can usually be obtained quickly
- Does not require you to be preparing to sell
- Is useful as an initial reference point
- Should not be assumed to equal an eventual selling price or formal appraisal
Home Appraisal
- Is performed by an appraiser
- Provides a separate valuation rather than an automated estimate
- May be required for mortgage lending or another specific purpose
- Should not be confused with an online estimate or a seller-focused review of current market conditions
Neither should be treated as a substitute for the other when a particular process specifically requires one form of valuation.
Where Does a Real Estate Market Analysis Fit In?
There is another piece of the puzzle if you’re considering selling: understanding how your property fits into the current market.
A seller is not simply trying to answer an abstract question about value. The seller is trying to understand how buyers may respond to the property when it competes with other homes available at the same time.
That means reviewing factors such as recent comparable sales, active competing listings, the property’s condition and improvements, distinctive features and current local supply and demand.
This type of market-focused analysis serves a different purpose from an automated estimate and a formal appraisal.
If you’re looking for the bigger picture, our guide to how to find out what your home is worth in Florida walks through the different ways to approach valuation.
Can an Appraisal and an Online Estimate Be Different?
Yes. Different valuation approaches can produce different conclusions.
An online estimate depends on the property and market information available to the system producing the estimate. An appraisal is a separate valuation performed by an appraiser.
There may also be property characteristics that are difficult for an automated system to fully understand from available data alone.
For example, two properties may have similar recorded characteristics but differ significantly in condition, renovations, lot position, view, outdoor improvements or other features.
Those differences are part of the reason you should not expect every method of evaluating a property to produce an identical number.
Does an Appraisal Tell You What Your Home Will Sell For?
An appraisal provides a valuation, but a property’s eventual selling price is established through an actual transaction between a buyer and seller.
Once a property enters the market, other factors become relevant.
Buyers can compare the property with homes they can purchase at the same time. The seller chooses how to position and price the property. Buyers decide whether to make offers. Negotiations and transaction-specific circumstances can also affect the eventual result.
That means an appraisal, an online estimate, an asking price and an eventual selling price are related concepts, but they are not interchangeable.
We explore that distinction further in What Determines the Selling Price of a Home in Florida?.
Which Factors Can Affect a Florida Home’s Value?
Regardless of which valuation method you’re considering, it helps to understand the characteristics that can influence the way a property is valued or perceived in the market.
These can include:
- Location
- Recent comparable sales
- Property type and size
- Condition
- Renovations and improvements
- Lot characteristics
- Property features
- Current local market conditions
Florida properties can also differ considerably from one market to another. A waterfront property, condominium, vacation home, suburban single-family residence or luxury property may each compete within a different market environment.
For a detailed look at those influences, read What Affects Your Home Value in Florida?.
Do Improvements Affect an Appraisal or Home Value?
Renovations and improvements can be relevant when evaluating a property, but homeowners should be careful about assuming that the amount spent on an improvement will automatically be added to the property’s value.
A renovated kitchen, updated bathrooms, newer roof, pool or other improvement may change how a property compares with competing homes. The effect depends on the property, the improvement and the market in which buyers are evaluating it.
If you’re deciding whether an improvement is likely to affect your property’s value, see Do Home Improvements Increase Property Value in Florida?.
Which Should You Use to Find Out What Your Florida Home Is Worth?
Start by asking why you need the valuation.
If You’re Simply Curious About Your Home’s Value
An online home value estimate is an easy starting point. It can provide an immediate indication of potential value without requiring a formal valuation.
If You’re Beginning to Think About Selling
An estimate can still be the first step, but you may want to go further by examining recent comparable sales, active competition, your property’s condition and features, and current conditions in the local market.
If You’re Preparing to Sell
Understanding how the property is positioned for actual buyers becomes especially important. An estimated value alone does not determine an appropriate pricing strategy or guarantee a selling price.
If a Lender or Other Process Requires an Appraisal
An online estimate should not be assumed to replace a formal appraisal when an appraisal is specifically required.
Start With a Florida Home Value Estimate
For most homeowners who simply want to begin answering the question “What is my home worth?”, there is no need to make the process more complicated than it needs to be.
Start with an estimate and use it as a reference point.
Then, if you’re considering selling or need a valuation for a more specific purpose, you can decide what additional information or valuation is appropriate.
Get an instant estimate of your Florida home’s value with Easy Realty and take the first step toward understanding where your property may stand today.
