Real Estate and Construction

What Is My House Worth?

Shriya Sarang

29th Oct'22
What Is My House Worth? | OpenGrowth

Despite the fact that the last few years have been quite volatile on many fronts, there is good news for homeowners: home prices have increased significantly. You might be considering selling your property to profit from the increase in value or using the equity it has gained. A good place to start as you weigh your options is by asking yourself: Exactly how much is my house worth?

 

How much is the value of my home?

 

Think about the three primary methods of valuation when obtaining a property value estimate:

 

  • Fair market value: Fair market value takes into account how your home appears to potential purchasers when compared to other houses in the neighborhood. Take into account the sale price of a home that is comparable to yours (the same number of bedrooms and bathrooms, square footage, or outdoor space, say). If you hire a real estate agent to assist you in selling your home, here is where they will begin: by examining comparable sales to see what purchasers have been prepared to pay for a home similar to yours.

  • Appraised value: Although it takes comparable sales into account, the assessed value of your home is different from its fair market value. A certified appraiser takes your home's location, size, and condition into account as well as any upgrades you've made when determining appraised worth. When a borrower purchases a property or refinances a mortgage, mortgage lenders consider the appraised value. Read about movable houses here.

  • Assessed value: Your home's assessed value is the financial amount that local county tax assessors use to calculate your property taxes. Jade Lee-Duffy, a Realtor with Reali in San Diego, explains that "tax assessors calculate an assessed value based on various factors, which may include the appraised value and the fair market value, as well as any home improvements, whether you generate income from the property, and any tax exemptions." According to Lee-Duffy, the assessed value frequently falls short of fair market value and does not accurately reflect how much a property might get on the open market.

 

5 Methods to Determine the Value of your Home

 

 

1. Use a house value estimator and enter your address.

 

Numerous online resources exist that provide a rapid estimation of a home's value. These internet resources, sometimes known as automated valuation models, or AVMs, produce estimates using algorithms and information that is readily accessible to the general public, including recent sales, tax assessments, and other public documents.

Pros: Online estimators and iBuyer offers are now powered by algorithms that have advanced significantly. Today, millions of people utilize them as easy ways to quickly acquire a ballpark estimate (or offer) by simply typing in a location.

Cons: Use caution when interpreting these computer-generated projections. They could occasionally be based on inaccurate or partial data, or they might not take into account, for instance, a recent luxury kitchen renovation or bathroom extension.

 

2. Request a free comparative market report from an agent.

 

If you're selling your home, real estate brokers generally provide a comparative market analysis (CMA) for no charge in an effort to earn your business. The agent gathers information regarding previous sales of comps in the neighborhood to complete the CMA. They then evaluate the value of your property using their local knowledge and any unique features of your home. Any home a buyer wishes to make an offer on may also receive this same service from a buyer's agent.

Pros: Having an expert discover comps, respond to inquiries, and offer advice is beneficial.

Cons: Various real estate agents may have varying comps or divergent assessments on the worth of your home. The estimate won't be as precise if there haven't been many sales in the area or if the comparable properties aren't that similar to your property.

 

3. View the webpage for your county or municipality's auditor.

 

Residential property values are periodically determined by county auditors for property tax purposes, and this data is available online. You can check your home's assessed valuation to see if it has increased or compared the figures to those of other properties that are for sale.

Pros: This factual information is available and offers another benchmark for comparison.

Cons: Since this estimate just considers your home's taxable worth, it might not take into account some market variables that influence the sales price, such as the season, competition, or curb appeal. Assessed values and market values may differ significantly in some areas.

 

4. Use the FHFA House Price Index tool to spot trends.

 

Another opinion on home worth is provided by the House Price Index (HPI) calculator from the Federal Housing Finance Agency. Based on the rate of appreciation of all the properties in the area over a specific time period, the tool analyses historical mortgage data to forecast what houses in your state or metropolitan area are likely to be worth.

Pros: Homeowners may evaluate the relative affordability of neighborhoods over time using the calculator, which uses data from tens of millions of home transactions and provides insights about broad house price swings.

Cons: This calculator does not provide a market evaluation of a specific home. Instead, it provides a glimpse at the rise or falls in housing prices over time. This won't get into the specifics of your house, but it will give you a broad picture of the neighborhood market.

 

5. Employ a qualified appraiser

 

Before authorizing a loan, mortgage lenders engage appraisers to verify the worth of a residence. Although it is optional, some house sellers choose to go the extra mile and hire an appraiser. Similar to a CMA created by a real estate agent, the appraiser takes into account the property's features, such as how many bedrooms and bathrooms it has, as well as comparable sales.

Pros: Professional appraisers may offer an unbiased evaluation of a home's value and are frequently licensed or certified by the state in which they conduct business.

Cons: You will be required to pay for the appraisal that the lender requires if you are applying for a mortgage.

 

The Conclusion

 

No single method of the home valuation can be relied upon to be 100% correct. Because of this, using a variety of resources might help you get a better idea of how much your house is worth. You may, for instance, obtain a free CMA and carry out your own investigation utilizing a home-worth estimator online, the FHFA calculator, and the county auditor's website. You could obtain a better idea of the value of your house by averaging all the final values you get.

However, in the end, the most trustworthy home value estimates are provided by experts who take the time to properly evaluate your property in light of a number of aspects. The most accurate resource for estimating value will be an appraiser and/or an experienced realtor, according to Krasow. "All of the evaluation tools are valuable in giving a sense of the worth of your home," he adds. As a computer cannot identify intrinsic value or take into account the state and renovations you've made to your house, a qualified specialist will have an advantage.

 

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Writing has been my natural get-away and peace-place. Eventually, I have been drawn to the depths of the world of writing with numerous topics which have fascinated me through time like -
- Business and Finance
- Professional Communication and Skill Development

Through writing, I hope to find the bigger and better purpose of our lives beyond the work-life bitter banter and truly feel worth living in every breath.

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