What Is My Home Worth? How to Use Free Automated Valuation Models

Your home is likely one of your most valuable assets. U.S. homeowners saw a significant rise in equity in 2024, with the average homeowner gaining roughly $28,000 over the previous year, according to the CoreLogic Homeowner Equity Insights report from Q1 2024.

If you are considering selling your home, you’ve probably wondered a lot about what your home is actually worth. You may have run across different types of free online valuation tools and have questioned how helpful they can be to accurately value your home.

These tools use automated valuation models (AVM) based on high-tech algorithms and loads of data to estimate your home’s value for free. So while it is possible to get a ballpark valuation using these free online valuation tools, it’s important for you to understand how they work and what their limitations are so that you can use them appropriately.

In this guide, we’ll help you understand the ins and outs of free online valuation tools and AVMs. For expert insight, we spoke with Sandi Bates, a top real estate agent in American Fork, Utah, who sells homes more than 54% quicker than other agents in her area.

A quick (and free) way to check your home value

Get a preliminary home value estimate in as little as two minutes. Our tool uses information from multiple sources to give you a range of value based on current market trends.

What is an automated valuation model (AVM)?

An automated valuation model is a tool that uses a machine-learning algorithm to compare your home against a massive dataset of other homes to estimate its value. An AVM uses a wide array of publicly available and user-sourced data, such as property type, size, general location, and comparable property sales to provide an immediate value estimate available through the click of a button.

If you’ve been exploring online valuation tools, you’ve probably noticed that the same property can have different estimates depending on which tool you use. While each tool follows the same general AVM approach, they also use their own proprietary data and models to estimate values. We can attribute the discrepancies that you notice to variations in the approach to building the model, and the type of proprietary data, such as user-submitted data or website analytics, that each tool uses.

What’s the difference between a free AVM estimate and a full appraisal?

While free AVM tools and full appraisals both aim to provide a valuation of your home, there are significant differences between the two approaches and the trustworthiness of the results.

You can use the table below as a cheat sheet when comparing an AVM and a full appraisal.

Free AVM estimate Full Appraisal
Who determines the valuation? Automated computer algorithm Licensed appraiser
How does it work? Finds similar homes from public records and historical sales data to estimate your home’s value Uses comparable property data, walkthrough to evaluate the condition, and other approaches like cost or income approach
What does it include? Value estimate with limited information about how it came to the value Detailed report, including which method the appraiser used, and a list of recent, comparable properties
How long does it take? Estimate available immediately Appraisal report typically takes 6–20 days
How much does it cost? Free (though some commercial AVMs exist mostly for lenders) Anywhere from $300-$500
How accurate is it? Ballpark accuracy, limited to publicly-available data The most accurate way to determine your home’s value
When should I use it? In the beginning, to get an idea and start making plans As part of the sale’s process, typically required by the buyer’s lender

AVM benefits and limitations

The primary benefits of AVM tools are their cost and immediacy. Because the process is fully automated, it takes minimal time and processing power to compare your home against hundreds and thousands of other similar data points to generate a ballpark estimate. Looking at comparable homes and what they’ve sold for is one of the main approaches to any valuation model, and AVMs can do it faster and more scalably than any other approach.

According to Bates, “Getting an online valuation is a good first step to get a ballpark number to act as a springboard or starting point in the home selling process.” But she also warns that setting expectations based on these estimates could lead to disappointment. “Sometimes people call in with unrealistically high expectations for their home’s value and are disappointed to see what actual similar homes are selling for.”

As Bates mentioned, there are multiple reasons that you should approach the AVM valuation with caution. First, an AVM valuation is only as good as the data it has access to. There may be multiple data points that are either too difficult to get in an automated fashion or are incomplete or inaccurate.

Bates describes one such example: “In non-disclosure states, such as Utah, [AVMs] lack actual data from the sale of a house, including the sales price. We’ve also seen these estimates significantly undervalue homes because the public record often doesn’t include the basement square footage in its property information.”

Other limitations to the data AVM estimates use include:

  • The home’s condition, including needed repairs and overall cleanliness
  • Recent upgrades, such as an updated kitchen or bathroom
  • Specific factors about the home’s location
  • Where it sits on the street, for example, a busy street or cul-de-sac
  • Access to nearby public transportation
  • The quality of the local school district
  • Zoning, such as short-term rental and accessory apartment ordinances
  • Special views or access to parks, the beach, trails, etc.
  • Community factors such as local laws or news coverage
  • Local hype, such as large employers coming to the area or movie sets

Full professional appraisal benefits and limitations

A full appraisal is the best way to get a trustworthy, accurate valuation for your home. Where the AVM approach relies fully on data and science, the appraisal approach leverages both science and art. Bates explains, “There are no two homes that are exactly alike, so you need a professional with experience to know which adjustments to make.”

A full, professional appraisal will always be performed by a trained, licensed appraiser. Typically, a homebuyer will pay for the appraisal required by the lender as part of the purchase process. Each state has a vigorous process for appraisers to receive initial and ongoing training specific to the real estate market and laws of the state. They are trained to use multiple qualitative and quantitative data points to determine a fair, accurate value.

There are a few different methods that appraisers use to value a home. Most of the time, the appraiser will use the sales comparison method to find comparable homes that have recently sold and estimate the value based on similarities and differences between the comparables. Sometimes, for new homes or homes that have few comparables, the appraiser will use the cost approach to estimate what it would cost to rebuild the home from scratch. The final method is the income approach, which is mostly used for investment properties to determine the home’s ability to generate an income.

Here are the major factors appraisers use when performing a full appraisal:

  • The property characteristics, such as property and home size, bedrooms, etc.
  • The general condition of the home and its structure
  • Any improvements and upgrades that affect the value
  • The home’s location and neighborhood
  • Special considerations, such as accessory dwelling units or energy efficiency

Alternative valuation approach: hybrid and desktop appraisal

During the early stages of the COVID-19 pandemic, on-site appraisals were considered a safety hazard. In order for home sales and transactions to continue with confidence, alternative appraisal methods appeared that minimized the need to be on-site for the appraisal.

Desktop appraisals are similar to full appraisals in every way except that the appraiser doesn’t physically visit and inspect the property. The appraiser will still use proprietary data from the market and comparables, including pictures, videos, and any other information about the subject property, to determine the home’s value. Desktop appraisals are quite a bit less expensive than traditional appraisals, but they can also miss any unique home characteristics that could affect the overall value.

The hybrid appraisal is a combination of the desktop and full appraisal approach (hence the term “hybrid”). In this approach, the hired appraiser does not conduct a property inspection but hires a third party to conduct the inspection and provide detailed notes. The appraiser then uses these notes, along with the other market and sales comparison data, to determine the home’s valuation.

The benefit of this approach is the speed of the appraisal report. Inspectors require far less training, so getting the inspection report is much faster than if the appraiser did it personally. Again, the sacrifice, in this case, is how well the appraiser can account for the property’s condition and unique characteristics without seeing them in person.

How can I find and use a free AVM estimate?

There are many free consumer-focused AVMs or home value estimators (HVE) available online. A simple Google search will reveal dozens of options from reputable providers. Because there are so many fast, free options, we advise you to try multiple tools in order to best triangulate your ballpark estimate.

Each provider incorporates its own algorithm and proprietary data into its model, so your particular property may get a higher valuation from one provider over another. Because none of the AVMs are very transparent about how their model works, or which exact data points they are using, you will have to do a bit of trial and error.

How does HomeLight’s free home value estimator work?

HomeLight’s Home Value Estimator is a fantastic option that includes a unique approach to valuing properties. We’ve done a lot of analysis and iterations to determine the right combination of publicly available, proprietary, and user-submitted data to produce more accurate value estimates.

The process includes a short questionnaire with seven questions that are proven to increase the accuracy of your home valuation estimate. These include simple information such as the property’s condition and the year it was built.

Another way to find out how much you could fetch for your home is by requesting a no-obligation cash offer from HomeLight’s Simple Sale platform. After answering a few basic questions, you can receive a no-obligation, all-cash offer for your home within 24 hours. If you accept, you can close the sale in as few as 10 days and choose your move-out date — no repairs, showings, or agent commissions necessary.

Having a full-time Realtor® with experience and access to the MLS (multiple listing service) is best for a reliable CMA. We aren’t appraisers, but we can usually get very, very close.
  • Sandi Bates
    Sandi Bates Real Estate Agent
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    Sandi Bates
    Sandi Bates Real Estate Agent at EveryUtahHome
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    Currently accepting new clients
    • Years of Experience 25
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    • Average Price Point $387k
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Partner with a top agent to determine your home’s value

After receiving your online home value estimate from HomeLight, we will connect you with top local real estate agents who can provide a comparative market analysis (CMA) for your home. An experienced agent can bypass the limitations of AVM tools to get you an accurate idea of your home’s value to help you list it for the right price. According to Bates, “Having a full-time Realtor® with experience and access to the MLS (multiple listing service) is best for a reliable CMA. We aren’t appraisers, but we can usually get very, very close.”

Use HomeLight’s Agent Match tool to connect with a top local agent in your area. The best agents can combine the art and science of home value estimates.

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The Bottom Line — Free AVMs are a great first step

While automated valuation models aren’t the same thing as “online appraisals,” they can help you get a quick ballpark estimate of your home’s value to get a loose idea that you can use to start exploring and making plans. However, as soon as you get serious about selling your home, we recommend consulting with a top agent who knows the local market and buyer trends in your area.

Header Image Source: (Caroline Feelgood / Unsplash)