How Much Is My House Worth?

One of the greatest challenges experienced when selling your home or any property is determining its worth. If you don’t know the worth of your house, you may have issues selling it.

Are you planning to buy, sell, refinance, or improve your house? Then, you may wonder about the actual worth of your home. The real estate industry has seen a titanic increase over the past years as home prices increased astronomically. As a homeowner, you may want to capitalize on this trend by selling your home.

If you have considered buying a house, selling your house, or are interested in buying houses in the real estate market, you must have asked yourself, how much is this house worth? The question has a partial answer, as there are many factors involved when looking at how much your house is worth. 

It’s a frequent misperception that the value of a house is determined by adding the costs of bringing it to its current condition to the value of the land. This is often inaccurate as that calculation will not give you the appropriate value of your house but an incorrect or underpriced value. 

Many things can happen when you wrongly estimate your home’s worth. You may lose a lot of money from the sale if you sell below the house’s actual value. Also, if the house has been listed for many months in the market but is unpurchased, you may be forced to continuously reduce the price of the home in a bid to convince or entice prospective buyers to consider buying it.

At the end of this article, you will be able to understand the more accurate way to establish what your house is worth. 

How Much Is My House Worth?

Due to the significant increase in home prices over the past few years, homeowners have experienced a significant breakthrough. You might be considering selling your house to benefit from the appreciation or the equity it has gained. Knowing your home’s exact value is a good place to start as you weigh your options.

Several factors can determine a house’s price or actual worth. Some of these factors include:

  • The location of the house.
  • The age of the house.
  • The square footage.
  • The home’s style (split, ranch, colonial, etc.).
  • The number of bathrooms and bedrooms in it.

Apart from the abovementioned factors, other factors that can be used to ascertain the value of a house are the home improvements and renovations both outside and inside the house, as well as the presence of a basement and if it is completed.

As a general rule of thumb, before buying any property, you would want to compare the standard or appearance of the house with other houses in the neighborhood. That way, you can appraise the home and know if it’s substandard, average, good, or the best in the area.

It would help if you considered some evaluations to know the worth of your house. This will guide you to an accurate home value estimate. They include: 

1. Fair market value

To determine fair market value, prospective buyers must be able to compare your home to similar homes in the area. This is done to compare your possibilities by using the sale price of a home like yours. If you hire a real estate agent to assist you in selling your house, the agent will attempt to determine the price that buyers would be willing to pay for a home similar to yours first.

2. Appraised value

The evaluated value of your home is different from its fair market value. When assessing appraised worth, a trained appraiser considers the location, size, and condition of your home and any improvements you’ve made. When a borrower purchases a home or refinances their mortgage, the appraised value is what the mortgage lenders look at.

3. Assessed value

Your home’s assessed value, which local county tax assessors use to calculate your property taxes, is its allocated dollar value. The appraised value, fair market value, home improvements, whether you make money from the property, and tax exemptions are all considered when determining the assessed value by tax assessors.

How Do I Know My Home Value?

Thankfully, there are many ways to better estimate your home’s worth. We mentioned about seven of them in this article. Depending on whether you are buying or selling a house, you can use this as a yardstick or calculator to measure the value of any home.

Below are the ways you can know the value of your house. They include: 

1. Input your address in a Home Value Estimator

home value estimator

Many online tools can quickly estimate a home’s value. The internet provides several tools to get the value of your house before selling. However, we advise against relying on the data or results of a single tool. Rather, you should test out two or more internet home value tools. It would help if you got a good estimate for your home when you use the data provided by several tools.

Automated valuation models, or AVMs, are online programs that generate estimates using algorithms and publicly accessible data, such as recent sales, tax assessments, and other public documents.

The fastest and surest way to know how much your house is worth is by filling in your address to real estate websites like Realtor and Zillow. Zillow, for instance, has a tool called Zestimate, which uses an algorithm to determine a home’s value. Zillow has invested a lot in its tool, and even though Zestimates isn’t perfect, its accuracy is frequently tested and improved.

Apart from Zillow and Realtor, other online home value estimators include:

  • Chase home value estimator.
  • Redfin home value estimator.
  • RE/MAX home value estimator.

Your estimate may differ because numerous home value estimators are available, each employing a different methodology. Although some home estimate tools on the internet can sometimes be inaccurate, they help you get home valuations quickly and conveniently.  While an internet home estimator provides a quick estimate of your home’s value, it doesn’t consider factors like the house’s condition, curb appeal, new upgrades, and external factors like traffic/environmental noise.

The benefit of these online home value estimators is that millions of people use them, and they provide estimates at a quick rate. All you need to do is type in the address, and the algorithm that powers the system produces a report on the property’s valuation.

On the flip side, the drawback is that these online estimators may provide incomplete, inaccurate, and erroneous data. Therefore, take their estimates with a grain of salt. For instance, if you recently upgraded some parts, like installing expensive quartz worktops or any high-end bathroom and kitchen renovation, it may not include that in its report.

2. Get a Comparative Market Analysis from a Real Estate Agent

If the estimate shows that now is a good time to sell your property, you should get a comparative market analysis from your real estate agent.

Typically, real estate agents and brokers provide a free, comparative market analysis (CMA) to homeowners willing to sell their houses. As the name sounds, a comparative market analysis (CMA) is an analysis of houses similar to yours sold recently in the area. For instance, if you have a three-bedroom, two-bathroom house in Atlanta, Georgia, it will likely sell for a price similar to other three-bedroom, two-bathroom houses recently sold in that area.

To complete the CMA, the realtor compiles data on previous but recent sales of houses in the area. They also use their knowledge, years of experience, and expertise to access the neighborhood and any distinctive qualities of your home before determining the value of your property.

There are several factors your realtor can consider when making their comparative market analysis. The CMA’s results will likely show the following information:

  • How much did you acquire your home?
  • How has the local and national real estate market changed since you purchased the house?
  • The perceived value of houses in the area.
  • The prices of homes sold in the area.

As mentioned, real estate agents typically offer a comparable market analysis to their clients for free. The requirements include your address and a list of any changes or improvements you’ve made to the house. Then, a team will be mobilized to take the information you provided and make a full CMA. At the end of their analysis, they will give you a complete home valuation report, which will also show you the competitive price of your property.

A buyer’s agent can also provide a similar service for any house or property a buyer intends to purchase. A qualified and experienced professional should know the neighborhood and be able to follow the market trends. Also, a good real estate agent should have the tools to get a precise, accurate home market value in any neighborhood.

This is beneficial because you can get an expert to identify comps, guide you, and answer any questions or misunderstandings you have. However, the problem is that different real estate agents use different comps and may have opposing views on your property’s value. Therefore, the estimate won’t be completely accurate.

3. Make Use of the FHFA House Price Index Calculator

The House Price Index (HPI) calculator from the Federal Housing Finance Agency provides another home or property value estimate.

This tool analyzes and reviews historical mortgage data. Then it uses the data to estimate the worth of houses in your metropolitan area or state based on their appreciation rate over a given period. This tool is great for anyone who wants to follow and track the property price trends in the neighborhood with time.

The advantage of the FHFA House Price Index Calculator is that it pulls data from millions of home sales in your area and offers insights into price fluctuations. Homeowners, realtors, and anyone who wants to sell their home can compare the affordability of homes in different neighborhoods around the area over a particular period.

Sadly, the disadvantage of this calculator is that it fails to estimate the market value of a specific home. Rather, it provides an overview of the home price depreciation or appreciation over time. Although this will give you a good estimate of real estate prices in your area, it won’t give you the value of your property.

4 Check Your Municipal or County Auditor’s Website

Municipal auditors go through the value of residential properties for tax purposes. Since this information is searchable, you can find it on the internet. You can check your county’s website to see the assessed value of your home.

The data insights it provides will tell you whether your house has risen in value. You can also compare the assessed value of your property with other houses listed for sale. This method is great for anyone who wants to see their home’s value from a tax perspective. Since the data is easily accessible, you can always compare the figures and prices with other homes for sale.

The drawback is that the estimate is only for the home’s taxable value and may not reflect some market factors that impact the sales prices, like competitiveness or curb appeal, period or time of the year, etc. In some places, the assessed value may be far below the market values.

5. Hire a Professional Appraiser

Mortgage lenders use appraisers to confirm the value of a home before approving a loan. Although hiring an appraiser is optional, some home sellers hire one for themselves. The appraiser looks at the property’s features very carefully. He will consider factors like the number of bathrooms and bedrooms, just like a real estate agent’s comparative market analysis (CMA).

If you want a mortgage, you must pay for the appraisal offered by the professional or lender. Typically, the appraisal costs around $350 on average, but you can get it anywhere between $315 and $440.

6. Have a Formal Appraisal

If you are sure you want to sell your home soon, try investing in a formal appraisal for it. An appraisal is an accurate tool showing you how much your home is worth when listed on the market. The rest and peace of mind an appraisal offers can be invaluable and priceless.

Although an appraisal may accurately show you the value and worth of your home, it is pertinent to know that a home will sell for as much as buyers and consumers think it should. So even if it gets appraised at a given price, it may not sell for that price but sell for what people perceive it to be sold for. Therefore, make it a priority to research or see a real estate agent to know what other houses in your neighborhood are selling for.

How Often Would I Check the Value Of My Home?

how much is the worth of your home

While you should evaluate your home’s value sparingly, doing so regularly, like once a year, is a wise choice for several reasons. Knowing your home’s current value enables you to make crucial decisions, such as whether your homeowners’ insurance policy still effectively protects the property, and can even go so far as to help you comprehend your home’s foundation.

The value of your home also impacts your taxes. Knowing the value of your home can also help you determine how much equity you have built up, which could help you qualify for a cash-out refinance, a home equity loan, or a line of credit.

Understanding your home’s value is crucial if you’re considering selling. You’ll know where you stand with buyers and what you can keep after transaction fees and taxes.

RELATED: How Much Does It Cost to Build a Modular Home?

How To Boost Your Home’s Value Before Selling

You will unlikely be happy after seeing low results from calculating your home worth. You may want to increase your home’s value before selling it. If you are considering boosting your home’s value, there are many things you can do that will make the work easier for you.

Some common practices to increase your property’s value are upgrading old features in your home, installing the latest or newer models of appliances, and repairing faulty areas. You could save money by doing light renovations, like replacing old doorknobs with new ones and repainting some rooms. Other cost-effective ways to refresh your home’s look are trimming the lawn, cutting overgrown grass, and planting new flowers. However, for large-scale renovations like replacing old sinks, countertops, old tiles, etc., you should get a professional to do the work correctly.

Renovations will need some investment, either time or money, whether you decide to do them yourself or hire a professional contractor. Hiring a professional contractor to fix the worn-down parts correctly and give the home a fresh look can bring in more profits for you when you sell the property.

Therefore, it is important to ensure that the house will be sold before taking up the responsibility for any upgrades. Before making any renovation or improvement to the home, calculate the ROI to ensure it is worth it.

What Should I Do When My House Value Goes Up?

Your home value can increase due to several factors. We have seen home prices increase in various places due to factors like limited availability and supply. The prices of these homes are further boosted by some of the lowest mortgage rates ever seen. While these rates increased, the prices remained high.

As a homeowner, you may want to take advantage of your increased equity if your home is your most treasured asset. Whether you rent, refinance, keep, or sell the house, it’s all based on the house’s market value. Therefore, the market value of your house matters because it can influence what you do with the house.

Typically, most people will see the home and take the profits or remove cash from their investment. With more equity in the property, you can wisely take advantage of a home equity line of credit (HELOC), a home equity loan, or a cash-out refinance and invest it in the renovation or remodeling of the home. However, each of these options has its disadvantages. If you sell your home to capitalize on the rising home values, you may start competing with other buyers in your local market to get a new home and dump all your profits into your new abode.

However, if you want to stay and enjoy the rising value of your home, you should be prepared to receive a higher tax bill soon. If you notice a rise in your home value, your neighbors have likely sold their properties, which will cause an increase in property taxes. Although its good to know your home value is increasing, the biggest drawback is that your property taxes will also increase.

Here are some things you should do when your home value increases:

  • Cancel Your Private Mortgage Insurance: You can save much money by eliminating. Suppose you are making payments for private mortgage insurance (PMI), and the value of your property has increased to the point where you have more than 20% equity. In that case, you can request your lender to cancel the private mortgage insurance premiums.
  • Adjust your homeowner’s insurance policy: Secondly, your homeowner’s insurance cost and coverage can be affected by your home’s value. If the value of your home increases, do everything to ensure that you are completely protected. Review your property’s value with your insurance company or agent annually and confirm it has the right coverage.
  • Sell your home: If your home’s value has risen, you may be in for serious profits. However, before listing your property on the market, measure the options at your disposal and evaluate if it is the right to move out for you and your family. If it is the right time to find a new home, decluttering your property, replacing broken or faulty parts, and making minor repairs will increase the home’s valuation and final sale price.

What Should I Do When My House Value Goes Down?

It can’t be all rosy; there are seasons when your home value drops. If your home value or price has dropped below what you paid for it, don’t panic. There are circumstances beyond your control that can reduce your house value.

Location/geographical factors, employment opportunities, market changes, climate changes, development, transportation, local political issues, and economic instability can impact your home value. If your home value is declining, then selling it may not be a good idea unless it is clear the values will continue to drop over time.

If you are bent on selling the house, you may have to wait to know if whatever factor caused a reduction in your home value will make it rise. You may make a rash decision when you rush to sell your property. Home property values are typically affected by the market or economic climate and the availability of properties on the real estate market. If your house value is dropping, hold on while you can, as they will increase as soon as housing prices rise.

What Factors Can Impact Your Home’s Value?

Some factors that can affect your home value include the size, age, present condition, neighborhood or location, recent improvements and upgrades on the property, tax rates, interest rates, economy, and the prices of houses in the local market.

Final Thoughts 

No home valuation tool or method can give you 100% accuracy in giving your home’s really worth. So combining different tools and resources is guaranteed to give you a clue on how much your home is worth.

For instance, you can request a free CMA from your realtor while using your municipal website and FHFA for research. You may also consider using different online home estimators. Combining the results and data from these methods should give you a precise value of your home.

The price of your house can also be determined with the aid of real estate agents. To do it, you must try to ascertain the prices of nearby residences comparable to yours. The best and most reliable way to determine the price of your home is with the help of a professional with enough experience, knowledge, and expertise in the field.

These professionals have evaluation tools that determine your home’s value and tell you its worth. A trained and seasoned professional will always include the improvements, renovations, and recent additions you made to the home, but a computer will not do this.

Getting a good guide to help you with your findings would make getting accurate information about your home easier. You could compare your property with recent transactions and active listings. An experienced agent will consider the condition of your home and all the other factors to get the average price for your house.

If you want to sell your home, get a refinance, or are just curious about knowing its worth, there are many ways to know it. Suppose you want to see and the market prices don’t favor you; you may have to wait until the market condition changes.

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