The ABC’s of Property Value: What’s My House Worth?

How much is my home worth? It’s a question that most people are naturally curious about. Not that you’re thinking about selling right this minute, but it is nice to know how much equity you have built up in your home and whether the market is going up or down at the moment for local property value.

Unfortunately in order to explain your property’s value, we are going to have to clarify some vocabulary – everyone’s favorite subject! The words that are most important to understand when you want to know how much your property is worth are: “Assessed Value, “ZEstimate”,  “Appraised Value”,  and “CMA”.  As realtors, we hear people confusing these terms and their meanings all the time, but we rarely jump in to give an impromptu vocab lesson because we can usually pick up what you mean to say even if the words get mixed up. However, since we have this whole article to sort it out, I’m going to dive right in!

Assessed Value – This is how much the Kenai Peninsula Borough says your home is worth for tax purposes. There is a person that works for the Borough and drives around once a year and takes a picture of the outside of your home, guesses at the condition of the interior and then places a property value to that. Sounds super accurate, right?

If your home looks great on the outside but is a dump on the inside or vice versa, they don’t know, because most locals aren’t inviting these assessors into their homes, but rather looking at them suspiciously out their window wondering if someone just got lost in their driveway.

I have had a few clients whose homes were assessed way higher than it turns out their house was actually worth because of this inaccurate means of assigning value to a property. That means these property owners were paying hundreds of dollars more on their property tax per year than they should have been, but never knew.

These assessed values are listed publicly on the Kenai Peninsula Borough website so you can see what yours is and how it has changed over the years.

ZEstimate – These are property value estimates from  Zillow who has never seen your house and doesn’t even do you the courtesy of a driveby like the Borough’s assessors. Nope, they just guess really. The reason I say this is because Alaska is a nondisclosure state when it comes to publicly sharing what price a property sells for. So all Zillow knows is that a house sold and was listed at $350,000. They therefore assume the sales price is $350,000 because no one is allowed to tell them otherwise. Even though that house may have sold for $250,000 (that kind of drastic difference happens more often than you know). Zillow then assumes that all other houses that size should also sell for $350,000, and can give an inflated estimate of property value to other nearby home owners. Additionally, the Zillow site has no idea what kind of condition your house is in compared to another house that just sold.

You can find your ZEstimate on – But keep in mind that right now for instance, the ZEstimate for one of the properties I am selling is $60,000 higher than what the actual market value of the house is and what it’s selling at. That’s a pretty high inaccuracy!

Appraised Value  – Now we’re getting to the good stuff! An actual appraiser, someone who has taken classes and become certified in appraising property value, actually comes to your house to see the inside AND the outside, and then puts together a very detailed report with photos, layout drawings, comparable properties, and estimates the value of your property. This is the real deal, and it usually costs around $700-$1000. Because of the cost, most people don’t have an appraisal done unless they are trying to refinance or are in contract to sell their home. 

The appraiser has to find other similar homes that have sold in the same area within the past six months or so (this can be tricky in Seward because of such a lack of inventory). Then they make adjustments to the value of those properties based on the difference in things such as square footage, garage, age and condition of the property, lot size, etc. They do this for multiple comparable properties and then average out all the values to find the most accurate value for your property that they can.

Not every appraiser is going to appraise your property for the exact same value as another appraiser, but they are working to streamline the system so that they are as unbiased and as accurate as possible – and if you’re buying a property with a bank loan, this appraised value is what the bank will depend on for how much they will loan you.

CMAA Comparative Market Analysis (CMA) is basically a simplified version of an appraisal. Because appraisals are expensive and appraisers themselves are often difficult to com
e by, many realtors offer this service to help you determine your property value. You will find that many busy realtors charge a fee (much less than an appraisal fee) for this service to cover their time in going to your property to see the inside, outside, layout and condition, then to follow up with some research on comparable local properties that have recently sold, put together a report for you, and then get together to discuss the results.  CMAs are usually prepared by local realtors who also have a feel for the area and knowledge of the true sales price of many different types of properties in the community.

CMAs are often used by seller when they are trying to determine what to list their property for. This can be a very good way to get an accurate idea of the value of your home, but keep in mind that it is a good idea to sit down with the realtor and have them explain to you how they reached that value.

In the end, your property’s market value is really determined by what a buyer will pay for it – not what you read on Zillow, what the assessor said, or how much you spent on it. The real estate market changes with all kinds of different variables. So if you really want to know what your property is worth at this moment in time, get in touch with a local realtor and use your newly enhanced vocab with the confidence.