If there’s one question most homeowners have asked themselves at least once it’s, “How much is my house worth?” Whether you’re aiming to figure out what your asking price might be, looking to refinance your house, or you’re just trying to better understand the real estate market in your area, it’s a good idea to figure out the answer. Below, we break it all down with the help of experienced real estate professionals from across the country.
How it’s calculated
There are a variety of different home valuation types and different calculations for each. The assessed value of your home is determined by a government assessor for your property taxes, though the methodologies vary depending on your location. A professional appraiser’s figure is known as the appraised value and is required by mortgage lenders. The appraised value can relate to the home’s curb appeal, square footage, the condition it’s in, and comparable homes (or “comps”) in your area. The appraised value may or may not align with the market value, depending on the state of the market at the time of listing.
The fair market value of your home is the price a home would sell for on the open market. When figuring out your home’s value for the purposes of listing it for sale, a range of elements are factored in, including its location, finishes, and square footage, along with more nuanced details like trends in your area and the market overall.
First steps online
You can’t be the only one asking yourself, How much is my house worth? So, if you’re simply curious about what the value, but not quite ready to sell, or if you are hoping to sell but not prepared to get in touch with an agent, looking into your home value online can be a great starting point. There have never been more tools available to find an estimate of your home value quickly and at no cost. Zillow and Redfin each have their own online home valuation tools, as does Realtor.com and many major banks.
“When sellers are trying to estimate how much their home could sell for, or how much equity they have in their home, the Redfin estimate is a useful tool,” says Redfin Chief Economist, Daryl Fairweather. Fairweather shares that the website also has tools that show you how much home values in your city or neighborhood have changed and how competitive the market is in in your area. Online tools are not without their drawbacks, though. “The Redfin estimate may not account for specific factors, like how well the home has been maintained,” Fairweather explains.
“[The utility of online tools] depends where you’re looking,” says real estate professional Bill Murray, the managing director of Compass Greater Atlanta. “If you’re looking at establishing values in a subdivision, where pretty much all the houses in the subdivisions are the same, then you can pretty much predict the appreciation in the value. When you’re in older neighborhoods, you can’t take a 3,500-square-foot house and a 3,500-square-foot house a block away and assume they’re the same value.” Given the drawbacks of online tools, it’s best to take their estimations with a grain of salt.
Calling in the professionals
For a valuation of your house that is personalized and takes local market trends into consideration, a real estate agent can help you find a price much more realistic than an online tool. Especially if you live in a fast-changing area—whether it be because of rezoning, new infrastructure, or any other change—this specificity is very important.