The value of your home matters. It’s probably the biggest financial asset you have and you need to know how much it is worth. Even if you aren’t planning to sell the house in the near future, it’s still important to understand its value should you decide to sell at some point or refinance or borrow against your mortgage.
Here are some different approaches to help you determine the value of your home.
Use a Free Online Home Value Estimator
There are numerous online tools that you can use to estimate the value of your home and each one uses different algorithms, so your values may be slightly different on each. The tools use information you provide about the house in addition to information from public records to calculate a value for the property. Keep in mind the value is only as accurate as the information used to generate it.
Some of the most popular online estimators are Zillow Zestimate home value estimator, Realtor.com MyHome home value estimator, and RE/MAX home value estimator. Any of these will provide you with a good starting point for establishing the home’s value.
Get a Competitive Market Analysis
If you want a more accurate valuation based on what is going on in your local market, ask a real estate agent for a competitive market analysis. Realtors use data on comparables in the area and their knowledge of the local market and neighborhoods to estimate the value of a property. They will also look at the home’s condition and consider upgrades when valuing the property, which online estimators won’t do.
Use the FHFA House Price Index Calculator
The Federal Housing Finance Agency’s House Price Index (HPI) calculator analyzes historical mortgage data starting in the 1970s to track a property’s change in value after every sale and then uses that information to project a value on the home. The value is based on fluctuations in the market over time. So, it gives you a value based on the rate of appreciation or depreciation of all homes in the area.
Analyze Your Own Comps
If you don’t want to engage with a realtor just yet, you can pull and assess your own comparables to estimate your home’s value. Browse the MLS listing for properties recently sold that are similar to yours in size, condition, and location. If there aren’t any recent sales, look at listing prices but keep in mind they are the asking prices and are likely to change. To get a realistic price range, you will need to find at least three comps. Once you have them, review and adjust them for differences between them and your home based on conditions in your market. With this information, you should be able to determine a price range for the value of your home.
Hire a Professional Appraiser
The most accurate estimate will come from a home appraiser. Lenders require an appraisal before approving a mortgage, but the homeowner can request an independent appraisal. Appraisers will come out to the house to assess the location and condition of the home. They look at a checklist of items related to the home as part of its value. They combine that property-specific information with comps to estimate the value of the home.
The value of your home is a critical piece of financial information. Any of these methods can help you determine the value of your home at any point in time.