Whether you’re thinking about selling your home or are in the market for a new one, house value is a topic that’s bound to come up. And, no matter which side of the deal you find yourself on, figuring out how much your home is worth can be difficult without involving real estate professionals.
However, if you follow a plan and take advantage of powerful, easy-to-use online tools, you can streamline the process to just a couple of simple steps. Then, you’ll either successfully list your home at the best price or avoid overpaying for a new one.
What Home Value Is & Why It Matters
The answer to “How much is my house worth?” varies depending on who you ask. A homeowner, appraiser or tax assessor may all weigh in on this topic at different times. But, most often, your home value refers to the dollar amount at which your property is most likely to sell, otherwise known as the current market value of a home.
Knowing the property value is essential for both potential sellers and buyers. The value of a home is closely connected to home equity and your financial freedom. As such, it directly affects your ability to refinance a loan or get lower mortgage insurance. It can also allow you to do some remodeling or pay off debt through a home equity loan or home equity line of credit.
In the meantime, as is the case with most assets, what your home is worth will not stay the same throughout the years. For example, over time, the amount of space that can be developed becomes increasingly limited, which means there will be more demand for less land, therefore driving up value. On the flip side, if the market drops, prices could go down.
Other factors can also influence the estimated value of your home. In fact, there are a myriad of details to consider when determining house value — including the year it was built, the condition of the building, the neighborhood and previous sale prices.
How to Estimate the Value of Your Home
Now that we understand the importance of knowing how much your house is worth, it’s time to review some simple steps to help you determine the value. From starting with a simple search for “what’s my house worth?” to researching trustworthy resources for local market trends, there are plenty of ways to begin your research.
For instance, you could use one of the many automated valuation models (AMVs) available online. Alternatively, you might check out the FHFA House Price Index Calculator for a quick estimate, request a comparative market analysis from a real estate agent or hire an appraiser for an in-depth overview.
However, if you don’t want to involve a real estate professional just yet, there is one method that hits that sweet spot between the easy-to-use feel of an AMV and hiring an appraiser to give you priceless insights, and that is evaluating comparable properties.
Although it may sound simple, evaluating comparable properties (comps) is not always a straightforward process. After all, just because a house sold down the street doesn’t automatically mean yours will sell at the same price. Factors like the square footage, number of bedrooms and the year it was built all play a role in determining how much your home is worth. Therefore, you’ll need at least three similar properties in order to get a good feel for what the true value of your house is.
How to Evaluate Comparable Properties
One easy way to compare properties is by using PropertyShark’s Comps tool. Built around actual sales data and not asking prices, this powerful and easy-to-use tool enables you to see what the market is offering — as opposed to what sellers would like to get. As a result, it allows you to compare apples to apples by evaluating houses that are similar to yours in terms of size, year built, zoning, neighborhood, tax class and so on.
Then, once you chose the comparable properties, you’ll need to adjust for differences between your house and the comps. To do this, take a look at the lowest and highest prices. The current value of your home should be roughly in the middle of those numbers.
Get started by signing in to your free or paid PropertyShark account. Next, go to “Comparables” and select the type of asset you are interested in — such as condo, co-op, land or building — and enter the address to get instant market stats and property estimates based on the latest sales.
To further refine your search, experiment with the wide variety of filters. For instance, you can narrow your search by adding the building class, tax class, square footage, zoning or anything else that you deem important to see the real market value of your home.
PropertyShark’s Comps tool provides essential data to homebuyers and real estate professionals alike. Specifically, its easy-to-use interface allows you to evaluate the value of a home by comparing it to the actual sale price of other, similar properties. You can even try out the Comps tool for free. This way, you can run one limited comp that displays three comparable properties to get a sense of how the filters can help you refine your research and determine the current market value of your home.
Register now and find out how much your home is worth with just a few clicks!