Perhaps you’re thinking about selling and have looked up your home’s value on Zillow, Trulia, or any of the numerous sites that offer an online home value estimate. Or maybe you’re considering the “For Sale By Owner” route and are using their suggested comps. Before you go any further, I’m here to help you understand a crucial piece of information: Online home values in Texas are not based on actual sales data.
Yep, that’s right. As a non-disclosure state, sold prices are not public information in Texas. This forces online estimation programs to use tax records and other data sources to come up with a value. If you read the home value FAQ on Realtor.com, you’ll learn that in non-disclosure states like Texas, “it is standard industry practice to estimate sale prices based on one of two methods: 1) transfer tax paid in a home sales transaction (most reliable estimate) and 2) first mortgage amount (yields a wider margin of error) in states without a transfer tax… That means the consumer will still see “free comps” of estimated sale prices instead of public record actual sales data.” (Source)
Since Texas does not have a real estate transfer tax, that valuation method is out. However, the tax appraised value is public information available via online tax records. Therefore many of the online estimates are based on tax appraised value, which is typically lower than current market value. Note: Tax appraised value and market value are not the same. Homeowners want the tax appraised value to be below market, and will often protest to keep it as low as possible. Lower tax appraised value = less property taxes paid!
You can see why accuracy is of concern when it comes to online home value estimates. If you’re thinking of selling and want to get an idea of your home’s current market value, your best bet is to contact me. With just a small amount of information (address, condition, upgrades, etc.), I can put together a “comparative market analysis” or CMA. I’ll pull current comparable homes (comps) with accurate sold data from the Austin/Central Texas MLS, and compare these homes with yours to determine the value. This information will give us a true understanding of your home’s market value — which is far more value than an online estimate.