What’s Your Home Actually Worth?

Start with Zillow's own numbers, because they publish them.

Zillow reports a median error rate of 1.83 percent for on-market homes and 7.01 percent for off-market homes. If your home is not currently listed, you are in the second group. On a $400,000 house, 7.01 percent is roughly $28,000 in either direction.

Zillow is also direct about what the number is: the Zestimate "is not an appraisal and should not be used as a substitute for one." They describe it as a starting point and recommend a comparative market analysis from a local agent alongside a professional appraisal.

Use it the way Zillow says to use it. It is a rough starting point built by an algorithm that has never been inside your house, seen your kitchen, or walked your street.

Because in Texas, the algorithm cannot see the one number that matters most.

Texas is a non-disclosure state. Under Tax Code §22.27, sales price information provided to appraisal offices is confidential and not open to public inspection, and Government Code §552.149 excepts sales data obtained from private sources from public records disclosure.

What that means practically: the price a home actually sold for is not public record in Texas. Automated models are built largely on public records and assessor data. Here, that data contains the property characteristics but not the sale price, so the model is extrapolating from list prices, tax assessments, and square footage.

Sold prices are reported to the MLS. A licensed agent and a lender's appraiser can see the confirmed closed prices on your street. The algorithm cannot. That is the entire difference, and it is written into state law.

Yes, expensively, and they said so in writing.

Zillow launched an iBuying arm that used its own algorithm to buy homes directly. On November 2, 2021, Zillow announced it was shutting the entire business down and cutting a quarter of its workforce.

The company's own explanation to investors: "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility."

Bloomberg reported write-downs of as much as $569 million.

Read that again. Zillow bet real money on its own price predictions and lost roughly half a billion dollars. If the company that built the algorithm would not trust it with their balance sheet, it should not set your list price.

A Comparative Market Analysis is a licensed professional's opinion of the most probable sale price, built by comparing your home to recently sold, pending, and active properties.

Building one means selecting genuinely comparable sales, adjusting each one for the ways it differs from your home, reading the current competition, and factoring live market conditions like inventory and absorption rate.

It is not a spreadsheet of nearby prices. Every comp gets adjusted, and the adjustments are where the judgment lives.

This represents an estimated sale price for this property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.

Fannie Mae's Selling Guide sets the residential standard appraisers work from: a minimum of three closed comparable sales, similar in site, room count, finished area, style, and condition. The guide notes a comparable need not be identical, but should be "competitive and appeal to the same market participants."

One thing worth correcting. You will hear "within one mile, sold within ninety days" stated as a rule. It is a common guideline and often a lender's own overlay, but Fannie Mae sets no maximum distance and no ninety-day cutoff. Their guidance explicitly allows using an older sale with a time adjustment over a recent sale requiring many adjustments.

The right comp is the one a buyer shopping for your home would genuinely have considered instead. Sometimes that is two streets over. Sometimes it is two miles.

An adjustment accounts for a difference between a comparable sale and your home. If the comp has an extra bathroom, its price gets adjusted down to estimate what it would have sold for without one.

The adjustments are derived from the market, not from a price list. The primary method is paired sales analysis, comparing otherwise similar homes that differ in one feature to see what buyers actually paid for that difference.

Price per square foot is a sanity check, not a conclusion. It ignores condition, lot, layout, and updates, which is exactly why two homes with identical square footage can sell $60,000 apart.

Pools are the clearest example of why adjustments are not a formula. In some price points and neighborhoods a pool adds real value. In others it adds maintenance and subtracts buyers. The market tells you which, if you look at the right paired sales.

All three, and each answers a different question.

Sold comps are the strongest evidence. They are what buyers actually paid, and they are what a lender's appraiser will lean on. Everything else is inference.

Pending comps show current demand. Something under contract tells you the market is moving at that price point right now, even before the closed price is confirmed.

Active comps are your competition and set a practical ceiling. A buyer looking at your house is looking at those too, side by side, on the same screen.

Sold tells you where the market has been. Active tells you what you are up against today. You need both.

Four different things, and Texas draws a firm legal line between them.

A CMA is a real estate license holder's opinion of probable sale price. A BPO is a broker price opinion, similar in method and often prepared for a lender. An appraisal may only be performed by someone licensed or certified under Texas Occupations Code Chapter 1103, working under the Uniform Standards of Professional Appraisal Practice. An AVM is an algorithm.

Texas rule 22 TAC §535.17 is explicit: a real estate license holder may not perform an appraisal or provide an opinion of value unless licensed as an appraiser. License holders also may not use the term "appraised value" to describe their own analysis.

So to be clear about what I do: I prepare a professional CMA, meaning an informed opinion of probable sale price built on MLS-verified closed sales. I am a REALTOR®, not a licensed appraiser, and I do not perform appraisals.

The sales comparison approach derives value from recent sales of comparable properties. This is primary for residential, and Fannie Mae requires market value be derived from it.

The cost approach estimates replacement cost minus depreciation plus land value. It matters for new construction, genuinely unique properties, and insurance. Fannie Mae is clear that appraisals relying solely on the cost approach are not acceptable.

The income approach values a property on its earning power and is required for two to four unit properties.

Two terms worth knowing because they show up in real valuations. Functional obsolescence is a value-reducing flaw in the home's own design, like four bedrooms served by one bathroom. External obsolescence is a negative factor outside your property line, like backing to commercial or fronting a busy road. Neither is fixable by paint.

The answer surprises most homeowners: exterior projects consistently beat interior remodels.

From the 2024 Cost vs. Value Report: garage door replacement recouped 193.9 percent nationally. Steel entry door replacement, 188.1 percent. Manufactured stone veneer recouped 153.2 percent nationally and up to 220 percent in the West South Central region, which includes Texas. That was the highest regional return in the study.

Now the other direction. In the same report, an upscale primary suite addition recouped about 24 percent. A major upscale kitchen remodel, about 39 percent. A major midrange kitchen, about 52 percent.

On the interior side, the 2022 NAR Remodeling Impact Report found refinishing hardwood floors recovered 147 percent, new wood flooring 118 percent, and an insulation upgrade 100 percent.

If you are renovating specifically to sell, the money goes on the outside and on floors. A $90,000 kitchen returns roughly half. Renovate a kitchen because you want to cook in it, not because you think a buyer will pay you back for it.

Yes, and appraisal has a name for it.

The principle of regression holds that a superior or over-improved property has its value pulled down by lower-valued neighbors. The most expensive house on the block rarely recovers its full premium, because appraisers have nowhere to find supporting comparable sales.

The principle of progression runs the other way. A modest home surrounded by higher-value homes gets lifted.

The principle of conformity ties both together: homes that fit their neighborhood appraise more predictably and resell more easily.

Practically, this means there is a ceiling in every neighborhood that has almost nothing to do with what you spent. If comparable homes on your street top out at $450,000, a $120,000 renovation does not produce a $570,000 sale. It produces a home that is hard to appraise.

School districts matter measurably. NAR reports that more than half of buyers with a child under 18 rate school district quality as important. Research from Realtor.com has found homes in top-performing districts sell faster and draw substantially more listing views than those in lower-performing ones.

Negative location factors like a busy road, backing to commercial, power lines, or nearby rail are treated as external obsolescence and measured through paired sales analysis. Appraisers find otherwise-similar sales with and without the factor and read the difference.

Two honest notes. These are genuinely hard to quantify because they are not searchable MLS fields, so it takes local knowledge to find the right pairs. And be skeptical of anyone quoting you a precise percentage premium for a school district or a cul-de-sac lot. Those figures vary enormously by market and price point, and a specific number stated confidently is usually invented.

Because the appraisal district is doing a fundamentally different job with fundamentally less information.

Ellis CAD values every property using mass appraisal as of January 1. Mass appraisal is efficient and necessarily imprecise. It uses statistical models across whole neighborhoods and cannot account for your specific condition, updates, or lot.

And remember the non-disclosure rule from earlier. The appraisal district does not know what homes on your street actually sold for. They are modeling value without the closing prices.

In fast-growing Ellis County there is a documented pattern of mass-appraisal models pulling existing home values upward toward new-build prices without fully accounting for age and condition. That is worth knowing whether you are selling or protesting.

Your tax assessed value is not a prediction of your sale price. It is a mass-produced estimate for taxation, and it can be meaningfully high or low.

Often yes, and the deadline is firmer than the process.

The deadline is May 15, or 30 days after your Notice of Appraised Value is mailed, whichever is later. Ellis CAD typically mails notices in April.

File on both grounds. Texas Tax Code allows protesting on market value and unequal appraisal simultaneously, and you should do both. Unequal appraisal compares you to similar neighboring properties, and it sometimes wins where market value does not.

Evidence that actually works: recent comparable sales, photographs documenting condition problems, and repair estimates. In Ellis County, documented foundation issues are particularly relevant given the clay soil.

The process runs informal review with a CAD appraiser first, then a formal Appraisal Review Board hearing if needed. The district must provide its own evidence at least 14 days before your hearing. A factual error, like wrong square footage, is fixed through a correction request rather than a protest.

There is real data on this, and it is not close.

From NAR's Profile of Home Buyers and Sellers: homes sold within two weeks earned a median of 100 percent of list price. Three to four weeks, 99 percent. Five to eight weeks, 98 percent. Nine to sixteen weeks, 96 percent. Seventeen weeks or longer, 94 percent.

Your listing gets its highest traffic in the first two weeks. That is when every buyer already searching your price range sees it new. Price above the market and you spend that window being compared unfavorably to better-priced competition, then you cut, and by then the listing carries days-on-market baggage that invites lower offers.

One more thing most sellers never consider: search brackets. Buyers filter in round numbers. A home listed at $505,000 is invisible to every buyer who set their maximum at $500,000, including buyers who could have stretched. Pricing at $500,000 or $499,900 captures that entire group.

Overpricing does not get you more money. It costs you the two weeks when the most buyers were paying attention, and per NAR, roughly six percent by the time the market is done with you.

Two North Texas realities that move value more here than almost anywhere else.

Foundations. DFW sits on Blackland Prairie expansive clay that swells when wet and shrinks when dry, stressing slabs year-round. The critical distinction is not repaired versus never-repaired. It is documented versus undocumented. A repair with a transferable lifetime warranty plus an independent structural engineer's letter is a manageable disclosure, and lenders generally proceed. An undocumented repair, an expired warranty, or a warranty from a company no longer in business creates real buyer hesitation and real price pressure.

Roofs. North Texas sits in one of the most active hail corridors in the country, and roof age drives insurability. The Texas Department of Insurance states it plainly: "As roofs age, some companies will switch to actual cash value. And if your roof is in poor condition, your company might not cover your roof at all." TDI's own example shows a twenty-year-old roof under actual cash value coverage paying nothing after the deductible.

A buyer who cannot get affordable insurance on your roof is a buyer who does not close. Find your warranty paperwork and know your roof's age before you list, not during the option period.