This blog was originally published at Divorce and Your Money here.

This episode is the final part in our four-part series on the marital home. This episode discusses determining the value of your home.

 It is important to have an accurate appraisal of your home, so that you can negotiate what will happen to the home after your divorce. Many people think they can rely on websites like Zillow, Redfin, or Trulia to estimate their home’s value, but they could be the worst options for you. As an example, Spencer Rascoff (the CEO of Zillow) recently sold his home for 40% less than estimated on Zillow. You do not want to rely on an inaccurate tool.

There are three reasons online appraisals are nearly useless:

1) Online home appraisals ignore interior conditions.

Real estate websites use statistics to calculate your home’s value, and are not able to factor in the condition of the interior. If you have a 20-year-old home, a website like Zillow will assume that your kitchen has not been updated in 20 years. So if you have invested money into renovations, they will not be accounted for. The same house with two different interiors can have vastly different market values.

2) Online home appraisals have a high margin of error.

These websites often have inaccurate data, such as the wrong square footage or number of bedrooms. In major cities, more than half of homes sell for an amount that is off by more than 5% from the Zillow estimate.

3) Online home appraisals do not properly account for your neighborhood.

Home valuation is often based on the selling price of comparable houses in your neighborhood. Websites like Zillow frequently get this price wrong by choosing homes that are not comparable.

For example, your home may be in an area where there are gated communities near ungated communities. The home valuations are going to be vastly different between those two communities, but a website will not be able to tell the difference.

Hire a licensed real estate appraiser.

You will need to hire a certified real estate appraiser. There is more information on appraisals in Episode 30 of this show (which will not be repeated here), so be sure to listen to that. Do not rely on an appraisal that is more than six months old.

Also, be sure to use a certified real estate appraiser (not a real estate agent). Real estate agents’ valuations are often inflated, and they will not hold up in court. Ask your attorney which type of appraisal is best for you.

There are three things you should do when choosing an appraiser:

1) Choose an appraiser familiar with your area. Make sure the appraiser knows your immediate market and neighborhood. In large cities, there is a vast difference between neighborhoods, so you need someone who is familiar with your local area.

2) Do your own research. Look at houses in your neighborhood that are like yours (including the number of bedrooms and similar features), and see what they sold for. Do not look at listing prices, because they more inflated that the actual sales price data.

3) Be present when the appraiser comes to your house. You can point out features of your home that the appraiser might not notice. You may have had recent renovations or some benefit that might not be immediately obvious. The benefits of your location are also good to point out (such as being near a good school). Pointing these things out will help your appraiser get as accurate a value as possible.

Conclusion

It is best to get a neutral appraiser that you and your spouse agree upon. If you and your spouse each choose a different appraiser, it can lead to a lot of expensive fighting when the numbers do not match. Sometimes, attorneys will manipulate these situations to pad their bill. It is not worth fighting over the value of your home, so choosing a single appraiser is the best way to go.

Appraisals are not an exact science. The appraiser may give you a range of values for your home.

By choosing a certified real estate appraiser, you can have confidence that you can use that figure if you need to testify before a judge. The figure might not be perfect, and the house might sell for a different number. But if the appraised value is fairly accurate, you can use it in negotiations. You can end up making expensive mistakes if you fail to get an accurate value of your home because you skipped this step.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.