Whether you’re thinking about selling your home or buying a new one, being able to determine the value of a home is a helpful skill to have. After all, you want to be sure you’re selling/buying your home at a fair price.
Knowing what determines home value and by using certain online tools, you’ll be able to have a reasonable idea of what your home (or the home you’re interested in buying) is worth on the market. Here’s what you need to know.
What Determines Home Value?
There are three main factors that home appraisers take into consideration when determining the value of a given property. These include the state of the local market, the property itself, and comparable properties in the area.
The local market has a lot to do with home value because it can vary quite a bit based on where the property is located, from the state and city, right down to the neighborhood it’s in.
The characteristics of the property also weigh heavily on its value. Such characteristics include the condition of the home, the amount of land it sits on, and the features the home is adorned with.
Before a value can be assigned to a property, an appraiser needs to find out what other comparable homes in the same area are valuing at. Data used to determine these facts include sales, costs, depreciation or appreciation, vacancies, and more.
5 Ways to Tell a Home’s Market Value
#1: Online Home Valuation Tools
Doing a Google search for “home value estimators” will provide you with dozens of different online home valuation tools you can use to get a baseline of what your home’s value could be. These tools are not 100% accurate, however, because there are a lot of individual factors they don’t take into consideration, but they can be a good place to start.
#2: FHFA’s House Price Index Calculator
Visit the website for the Federal Housing Financing Agency and use their house price index calculator. This tool is a little more accurate than most standard online valuation tools because it uses a repeat sales method that compares millions of mortgage transactions over the last several decades.
#3: Request a Comparative Market Analysis
When you’re sure you’re about to put your home on the market or to start looking for a new home, you can ask your real estate agent for a comparative market analysis report. The agent will write up a report for your home based on their estimated value of the property. Just keep in mind, the agent will be providing this information with the hopes of being hired as your listing agent, so the numbers can sometimes be a little higher than average.
#4: Evaluate Comparative Properties
If you live in a neighborhood where a lot of the homes share the same floor plan, then you can get an idea of how much your home is worth just by evaluating comparative properties already for sale in your area. When doing this, try to compare against properties with similar characteristics as yours, or the numbers could be skewed.
#5: Hire a Property Appraiser
Before a mortgage can be approved, the lender has the property professionally appraised. As the homeowner, though, you can perform the same process at any time. Just hire a property appraiser to inspect your property and provide you with a valuation.
Thompson Creek Can Help You Maximize Your Home Value
If your home isn’t worth what you thought it would be, there are some things you can do to help improve its value. Replacing old windows with new energy efficient windows is a great place to start. Having a new roof installed is another way to enhance your home’s value on the market because buyers don’t want to have to worry about such expenses, making your home easier to sell. New siding on the exterior of your home will also boost your home’s value.
At Thompson Creek, we can help you with all that and more. Just call the experts at Thompson Creek and get a free estimate for your home improvement projects today, and invest your money in something that can make a positive difference in your home’s market value.