Planning to sell your home? Or are you curious to estimate the value of your home?
As a home seller, there might be many questions that would come to your mind. Some of them can be:
- Is my home value trending upward or downward?
- What is the value of my home compared to other homes in my neighborhood?
- What is the value of my home value compared to other zip codes in my area?
While all these questions swirl in your mind, you will be relieved to know that it’s easy to find the value of your home.
How? With this blog.
In this article, we shall discuss ways in which you can find the value of your home. This information is helpful, especially if you plan to sell your home to a cash buyer where no agent is involved.
Ballpark Value with Online Valuation Tools
According to a survey, 22% of U.S. homeowners who determined the value of their home used an online estimator?
Yes! Online tools are this popular among people. The technical term for these tools is the Automated Valuation Model or AVM.
You can easily find these Online home value calculators and are generally free of cost. These tools give you a quick estimate of your house’s value using public records and other information associated with your home.
But do not get too excited or disappointed with these estimates. While these online estimates are easy and helpful, they can vary from one tool to another. Mostly, these estimates do not give considerations to factors like unique aspects of your home, renovations or repairs, etc.
FHFA’s House Price Index Calculator
Federal Housing Financing Agency offers a scientific approach to estimate the value of your house using a unique calculator. It is the house price index (HPI) calculator. It projects the current worth of the house.
“ The HPI calculator is an easy way to see how much your house may have appreciated over time.”
Will Doerner, FHFA Senior Economist
Get a Comparative Market Analysis
It is an effective way of knowing your home’s value. Professional Real estate agents access a multiple listing service (MLS) database of homes for sale in your area and prepare a CMA. This MSL takes into account homes similar to yours in size, location, number of bedrooms, style and view, etc. A CMA provides an estimate of value, typically for listing purposes, and answers questions like:
- For what value homes similar to yours are selling?
- How long is it taking them to sell?
- What homes sold for compared to their original list price?
Evaluate Comparable Properties
Over half (56%) of U.S. homeowners estimated their home’s value by looking at comparable properties. To choose accurate comps, you must employ an “apples to apples” approach, i.e. comparing two similar kinds of house. Some of these factors include the same:
- Structural components and features
- Age and size
- Sales history
- Any upgrades or improvements
- Overall condition of the home
- Neighborhood and location
- Listing price vs. actual sale price
However, there is a caveat here. You need to account for the differences between your house and the comps. For example, adding value to the comp price if it has a swimming pool or subtracting value if its interior is outdated. How much you add or subtract depends on conditions in your market, which can vary widely and can be a tricky process. A rough estimate of your home value is somewhere in the middle.
Get a Professional Appraisal
You should follow this approach, especially if there aren’t many comps for a CMA in your area or if the real estate market seems to be shifting.
According to the survey, more than one-fourth (28%) of U.S. homeowners determined their home’s value through an appraisal.
Appraisers provide an impartial and thoroughly researched estimate of a home’s value. They do that by visiting the property and evaluating the market and recently sold comps.
An appraisal can back up the research you’ve already done with online valuation tools or a realtor’s CMA. With a good CMA, you get the opportunity to counteract a low appraisal from a buyer. However, you’ll likely pay a few hundred dollars to have a home appraisal carried out.
Knowing your home’s value allows you to evaluate whether the deal is profitable or not. Not only this, refinances, home equity lines of credit, insurance premiums, and annual property taxes are all based on home value.
