How Much Is My Property Worth?

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A short overview

Knowing how much your property is worth, as a home seller or an investor, is an invaluable piece of information when it comes time to sell the property. There are a few ways to find out how much your property is worth, from consulting a real estate agent to using an online calculator. Whichever method you choose, getting to grips with the price of comparable properties in the area is a good place to start.

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Selling your home can be a daunting experience if it’s the first time you’re doing it. You’re probably nervous about pricing your house correctly, because this has a large impact on how quickly your home sells. However, at the same time you need to make sure that you’re getting what you need out of the sale too. Pricing your home too low can be detrimental to you financially as the seller and pricing it too high can be a problem for getting it sold. So, if you’re asking yourself, “how much is my property worth?”, let’s take a closer look at a few ways to figure out the value of your home.

Types of property value

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First things first, when you’re working out the value of your home, it’s important to understand the different types of home value.

  • Assessed value: This is the dollar value of your home that your local county tax assessors are using to work out your property taxes. This value is determined by numerous factors which can include any home improvements that have been done, the appraised value, the fair market value of the home and whether it generates income or not.
  • Fair market value: This is the amount you’d be able to sell your home for, if you were to sell it that day in normal market conditions, without using a real estate agent. It’s determined by factors like the characteristics of the property, the market in your particular area, and the buying or selling pressure.
  • Appraised value: This is quite simply the value that is determined for your home by a licensed appraiser. It will factor in things like the location, size, condition of your home and any improvements that have been made.

4 ways to find out how much your property is worth

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1. Comparative market analysis

A local real estate agent will be able to help you determine the value of your property by conducting a comparable market analysis (CMA). This involves the agent using their knowledge of the local housing market, alongside factors like the property’s age, size, style, condition and a host of other considerations to determine the value. A CMA also factors in the prices of homes in the area that are similar, with the aim of providing a seller with an idea of what price to list their home at. An agent can usually provide this at little to no cost.

2. Get it appraised

An appraiser will give you the most professional home value estimate. Appraisers are used by mortgage lenders before they approve loans. The appraiser will consider the features of the home, the housing market, as well as comparable properties in the same location. A home appraisal is an objective way to work out a property’s value and is delivered in an official report. Bear in mind that appraisals can cost a few hundred dollars.

3. FHFA House Price Index Calculator

For a scientific approach to working out your property’s value, that won’t take a long time to generate, you can try the Federal Housing Financing Agency’s house price index (HPI) calculator. The tool uses something called the “repeat sales method”, which means that it tracks your property’s value across each sale and uses this information, combined with the market conditions and home mortgages, to determine your property’s value.

4. Home value estimators

A quick search online will show you the multitude of home value estimators available at the click of a button. According to a NerdWallet survey, about 22% of homeowners in the US have used online estimators to determine the value of their property. These tools use specific algorithms to formulate an estimation of your home’s value that also factors in any data that is available to the public, such as tax assessments. We’ve listed a few tools below that can help you estimate your property value online.

Tools that can help you estimate property value

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Online home value estimators can save you time and money. There are number of these available, but here are some of the best home value estimators that are frequently used in the real estate market.

New Silver’s ARV Calculator

This free online tool is a useful way to work out what your property’s current value is and what the value would be if you had to improve it (After-Repair Value), by assessing the value of comparable properties in your selected suburb. All you need to do is fill in the address, and you can find out your property’s value in a few moments.

HomeLight’s Value Estimator

This super quick estimator gives you an idea of your home value in less than 2 minutes, by answering 7 questions about your property. The tool factors in housing market data, uses geolocation technology to look at comparable properties in the area, and uses their investor network to generate offers on the property. This information is all combined to come up with a property value estimate in minutes.

Redfin’s Home Value Estimator

This tool allows you to choose between an instant home evaluation done by the algorithm, or to request a professional evaluation from an agent. Redfin’s home value estimator uses online data from the Multiple Listing Service (MLS) to look at homes sold recently in the same area, along with information about your home.

Why are comps so important when estimating property value?

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‘Comps’ is the terms used for comparable properties in real estate. The goal when assessing comparable properties (comps) is to gain a realistic valuation of your home, based on the recent history of comparable sales in the area. Why are comps so important when you’re estimating your property’s value? Comps show how much buyers are willing to pay for similar homes in the same area. Buyers also use comps, to get a sense of what they should offer on homes, so these are important numbers to consider when you’re determining the value of your home.  

If you’re wondering how to get comps on your house, here are a few ways:

  • Use a real estate website like Zillow because they have a large database of properties. Zillow’s “sold” feature is particularly useful when you’re looking for comps.
  • Ask a local real estate agent, they have a specialized understanding of the real estate market in each area and will have access to the MLS, to find similar properties. It’s a quick way to get instant access to the information you need.
  • Try an ARV calculator such as the one by New Silver. It is completely free and is essentially a search engine for comps in a specific area. You can simply enter the address, and the calculator returns sales data for properties that are similar in specs and located nearby.
  • Investigate the neighborhood to find homes that are for sale, or already sold, to get an understanding of how other homes in the area are priced.

FAQ

AVM stands for automated valuation model. The term is used to describe a program that automatically analyses data about existing properties and transactions, to estimate the value of a property. Typically, these are online tools where people can type in the address and get this estimate easily. For example, Zillow’s Zestimate real estate evaluation tool.

A Comparative Market Analysis (CMA) in real estate is a tool used by real estate agents to determine the value of your home. It takes into account 3 homes that have been sold recently in the area and that are comparable to your property. Ie: have similar features and are located nearby. The analysis uses housing market indicators and features of the property (such as size, number of bedrooms and bathrooms, date of sale and so on) to generate an overall picture, in order to formulate a value that’s as accurate as possible.

Yes, there are many online home value estimators available. In fact, these tools are some of the easiest and most convenient ways to get a quick estimate of your home’s value. It’s not as accurate as having an agent or an appraiser work out your home’s value, but it is a good first step to getting an idea of your home’s value.

To work out what your home could be worth in the future, you’ll need to factor in the appreciation rates in the area. Home appreciation is the rate at which property increases in value over time. Property owners and investors can gain a lot over the years, as property prices often increase significantly with time.

You can work out the real estate appreciation in your area by looking at listing websites, researching online or consulting a real estate agent. Even in the midst of financial disasters, property has continued to appreciate over the years, so when you’re buying a property it’s a good idea to work out what it could be worth in a few years if you decided to sell it again.

There are online calculators that can help you with this calculation, like New Silver’s Home Appreciation Calculator that factors in the current value of your property, the appreciation rate in your area and how many years in advance you’re looking at.

Closing thoughts

Getting the estimated value of your property is easier than ever before, with simple online calculators available at the click of a button. Comparable properties are an integral part of this calculation so remember to do this analysis as well. Knowing what your property is worth is a vital first step to selling your home so that you can price it right from the outset.