Using the Valuation Tool

What Is Your Home Actually Worth?

You know what you paid for your home. You might know what Zillow says it is worth. But where do those numbers come from, how accurate are they, and what are they missing? This lesson explains how property valuation works, from the quick automated estimate to the full appraisal a lender orders. Understanding valuation helps you interpret the numbers you see online, spot when your home is undervalued or overvalued, and make better decisions about selling, refinancing, or borrowing against equity.

Comparable Sales: The Foundation of Valuation

Every property valuation starts with comparable sales (comps). A comp is a recently sold property that is similar to yours in location, size, age, condition, and features. Appraisers typically use 3-6 comps within a 1-mile radius that sold in the last 6 months. They adjust for differences: an extra bedroom adds value, a busy road subtracts it, a renovated kitchen adds it, a smaller lot subtracts it. These adjustments are part science, part judgment, and part local knowledge. Two appraisers using the same comps can arrive at different values because they weight the adjustments differently. In neighborhoods with many similar homes (subdivisions, planned communities), comps are abundant and valuations are tight. In rural areas or neighborhoods with diverse housing stock, comps are harder to find and valuations spread wider.

• Comps should be within 1 mile and sold within 6 months
• Adjustments are made for size, condition, features, lot size, and location
• More comps available = more reliable valuation
• Fewer comps = wider range of possible values

AVMs, Zestimates, and What They Get Wrong

Automated Valuation Models (AVMs) use algorithms to estimate property values from public data: recent sales, tax assessments, property characteristics, and market trends. Zillow's Zestimate is the most well-known AVM. Zillow reports a national median error rate of about 2.4% for on-market homes and 7.5% for off-market homes. On a $300,000 home, 7.5% error is plus or minus $22,500. That is a $45,000 range. AVMs struggle with properties that have been recently renovated (they cannot see inside your house), unique properties with few comps, homes in rapidly changing markets, and rural properties with sparse sales data. A full appraisal by a licensed appraiser costs $400-$600 and includes a physical inspection. A broker price opinion (BPO) from a local real estate agent is often free and relies on their market knowledge plus comps. Both are more accurate than AVMs for any individual property.

How Covey's Valuation Engine Works

Covey pulls from free public data sources: county tax assessor records, parcel data, recent sales, and market statistics. We enrich that data with property characteristics from multiple databases, overlay it with local market trends, and apply our valuation models. The result is an estimate that accounts for what public AVMs often miss: lot topology, neighborhood-level price movements, and property-specific attributes from parcel records. Our approach is transparent. We show you the data sources, the comparable sales we used, and the confidence range on the estimate. No black box. You see the inputs, not just the output. We also estimate what your property would rent for, which matters whether you are considering becoming a landlord or simply want to understand the full financial picture of your home.

You have spent this track learning about home buying, mortgages, equity, and valuation. Now apply it. Enter your address in the Deals tab to see what your home is worth, what it would rent for, and how it compares to recent sales in your neighborhood. This is not a generic estimate. It uses parcel-level data specific to your property.