4 Ways to Determine House Value

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Whether you’re thinking of buying, selling, or even refinancing — or you are just curious — you might like to know how to determine a house’s value. Fortunately, there are several ways to find out how much a house will be worth, and you might get different comes from each one.

Here are some options for finding the associated with a home:

  1. Online house value calculators
  2. Comparative marketplace analysis from a real estate agent
  3. FHFA House Price Index Loan calculator
  4. Professional appraisal

How to find the cost of your home

To determine your home’s value, consider one or more of these methods.

1 . Online home value calculators

Online house value calculators use automatic valuation models, or AVMs, to estimate how much your house is worth. These estimates depend on a wide range of property and local market data, including your home’s square footage, number of sleeping rooms and bathrooms, recent equivalent sales, local market tendencies, and more.

Online valuation tools don’t are the reason for unique features of your home that may increase or decrease its value, such as how old your roof is or when you last remodeled your cooking area. For that, you’ll need a professional appraisal.

Tip: You’ll also get different home values from different calculators because they use proprietary formulations.

Here are two residential value calculators we like:

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2 . Comparative market evaluation from a real estate agent

If you’re planning to hire a real estate agent to help you sell your home, you can ask them for a relative market analysis, or CMA. They’ll look at similar, lately sold properties in your area plus analyze how they compare in order to yours. After that, they’ll reach a fair market value and help you set a strategic listing price for your home.

A CMA requires a proficient local agent who can evaluate how other homes’ features contributed to their selling price, along with how your home compares and how to estimate its value accordingly.

Your agent will also need to understand intricacies such as how much buyers in your area will devalue a property that backs up to a major street or how much value a screened-in patio adds.

Notice: How to Improve your Home Value: Complete Guidebook

3. FHFA Home Price Index Calculator

The Federal Housing Finance Agency’s (FHFA) House Price Catalog (HPI) Calculator is an online tool that may tell you how the estimated value of a home in a given metropolitan statistical area (MSA) may have changed since you purchased this. Its calculations are based on the percentage change in house values in the MSA during that time span.

The particular FHFA’s HPI calculator is not likely to be useful to an individual who is definitely buying or selling a home. That’s since the values it provides are based on averages, and it can’t tell you the exact value of a specific house. Homes within the same MSA can have wildly different values due to the fact an MSA encompasses such a large area. The HPI doesn’t account for neighborhood disorders or a specific home’s characteristics.

This tool, and all the data behind the HPI, might help you out if you’re a researcher or a good economist, or if you just want a quick overview of how property values have trended in the area over the years. But if you are looking for a more accurate valuation of your home, we’d recommend going with an expert appraisal.

4. Professional evaluation

Hiring a professional appraiser costs several hundred dollars but is often the ultimate way to get the most accurate value for your home. That’s why mortgage lenders often require a home appraisal before they’ll approve your own mortgage application.

Good to learn: Lenders do sometimes rely on AVMs to save time and money or even waive the appraisal for a refinance or even second mortgage.

Here are some of the aspects appraisers take into account when setting up a value for your home:

  • Location
  • Square video
  • Interior and exterior condition
  • Number of bed rooms and bathrooms
  • Lot size
  • Age of the home
  • Heating and cooling
  • Improvements and renovations (such being a new garage door or hardwood floors)
  • Neighborhood and surrounding properties
  • Home design
  • Current market problems

What is home value?

There’s more than one way to figure out a home’s value. Listed here are three valuation methods for home real estate and the different reasons they serve.

Fair market value

Fair market value is just how much someone is willing to spend on your home. It’s based on supply and demand and points out why old mansions in Midwestern cities with major population losses can cost lower than starter homes in bustling West Coast cities.

Fair market value presumes that the seller isn’t giving the buyer any breaks to the price, and that the buyer has a solid understanding of the property’s characteristics.

Appraised value

Evaluated value is how much your home is worth for lending purposes. It’s determined by a state-licensed appraiser.

The particular appraised value may be higher or lower than fair market value. If it’s lower, the vendor will need to lower the price. Or else the borrower will need to increase their down payment to gain mortgage approval and close the deal.

Suggestion: Appraisers play the role of objective, but can make errors or be biased. You are able to challenge a low home appraisal with solid information.

Evaluated value

Evaluated value is how much your house is worth for property tax purposes. To find the assessed value of your home, you can look at your property tax statement or contact your local property tax assessor.

Some jurisdictions have websites where anyone may look up a property’s evaluated value. Assessed value may be less than the property’s present fair market value. Common causes of this include homeowners exemptions and statutory limits upon annual property tax raises.

Keep Reading: Real estate Tax Assessment: What It Is and What It Means

Regarding the author
Chris Jennings
Chris Jennings

Philip Jennings is a Mortgage Publisher and Credible authority on mortgages and personal finance.

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