Essential steps to determine the value of your home

Every home has three values – seller’s value, buyer’s value, and the appraiser’s value. Each of these three people has its own idea of how much a certain property is worth. And, the key to determining the right value of a home is to get those three numbers to align. When you do that, you will not only sell your home faster but you will also sell it for a lot more money! 

However, do not take this task lightly; determining your own house value can be tricky. These kinds of values are subjective and they are changing all the time. As a seller trying to value your home right, it is of key importance for you to understand how home value is calculated and what are all the factors that play a major role. We will help you out with that – here are some of the most essential steps to determine the value of your home. 

Online Valuation Tools Can Be Helpful 

Sometimes, the easiest way to determine the value of your home is by opening your search engine and typing ‘How much is my home worth?’ According to recent research, this is something that almost 30% of sellers do when the time comes for them to say goodbye to their home. The right name of this online valuation tool is the automated valuation model or AVM for short. It is very easy to use and it can give you all sorts of information – from the value of your home to all the things you can do to increase the value of your property.

What this AMV tool does when trying to determine the value of your home is using public records and mathematical modeling and combining them with all the available listing prices and recent sales in the area you live in. However, keep in mind that there are different valuation tools out there. Some are free and some require your credit card. And, most importantly, some are more precise and more reliable than others. Thus, be careful and do not rely solely on them. 

Acquire a Comparative Market Analysis

As mentioned before, if you want to sell your home for the right price, you cannot rely only on those AMV tools. Thus, do not call your just yet, but spare some time to dive deeper into the value of your home. Do that by getting in touch with a local real estate agent. Ask him/her for comparative market analysis, or CMA. You may get this piece of paper for little or no money, so give it a try. It will certainly help you determine the value of your home more precisely. However, because this is can be so easily acquired, it may not be as detailed and as precise as a professional appraisal!

Use the FHFA House Price Index Calculator

If you are in a hurry or if you do not want to spend money on real estate agents and professional appraisals, you can also use the FHFA house price index, calculator. FHFA stands for the Federal Housing Financing Agency and it uses a more scientific approach for determining the value of your home. This tool has an access to millions of mortgage transactions gathered over the last couple of decades. Using this kind of data, the tool tracks a certain home’s change in value from one sale to the next. 

FHFA can be of great help. But, it can be of help only if you have a conforming loan. If you do not, it will be of no use to you. Moreover, keep in mind that this calculator does not take the condition of your home into consideration. That is, this tool does not know whether you have built a home theatre inside, whether your kitchen is remodeled completely, or even what season it is.

Hire a Professional Appraiser

Nowadays, you can hire anybody to help you with anything! For example, if you want help carrying bulky pieces, you hire professional movers. And, if you want to find out the exact price of your home, you hire a professional appraiser. To be honest, a professional appraiser is the only one who can determine the right price of your home.

What appraisers do is evaluate the market in which your home is situated. They check the city, the neighborhood, and the street you live in. Moreover, they also evaluate all the characteristics of your property – the condition of your home, the land, the indoor and outdoor looks of your home, etc. What is more, appraisers also evaluate the ‘comps’ or the comparable properties, which are of key importance for determining the current value of your home? 

Do Not Forget to Evaluate the ‘Comps’ 

Last but certainly not least step to have in mind when trying to sell your home for the right price is to evaluate the ‘comps’. As mentioned above, comps are comparable properties. Analyzing them can be a complex task, so if you have never done this before, better leave it to professionals. Appraisals and real estate agents can evaluate the comps based on the recent sale values of similar homes. They will take into consideration things like costs, listings, sales, etc. 

If you, however, decide to evaluate the comps on your own, bear in mind that an “apples to apples” approach is the only one you can employ here. That is, you must compare the homes which are similar in square footage, numbers of bedrooms and bathrooms, location, condition, and all the recently done upgrades. For instance, you cannot compare your first neighbor’s 3-bedroom house with a remodeled kitchen with your 2-bedroom house and a run-down kitchen. Only if you remodel that kitchen of yours and find a way to create an extra bedroom could apply the comps.

Meta description: If you were wondering how much your home costs, here are some essential steps to determine the value of your home.