It is a long journey from making the decision to sell your home to the actual sale of the property. The first step you need to take is to determine the value of your home. What is my home worth? It can prove to be a tough question indeed but it is made easier by the modern proliferation of online resources.
Home sellers and buyers, and real estate agents and brokers have access to more information today than was ever thought possible merely a decade ago. You cannot, however, always rely on an online calculator to determine your home’s value, even if they are useful tools in the appraisal process. So, how do you determine the true value of your home? Let us take a look at some ways.
1. Online Valuation Tools
There are dozens of home value estimators, or automated valuation models [AVM], available online. Offered by real estate websites like Redfin and Zillow, these tools use algorithms to predict the value of your home through data variables such as listing prices in your area and recent sales.
Remember that all these tools are offering you is an estimate and not the actual value of your home.
2. Local Tax Assessment
Once you have gathered a few estimates from online valuation tools, head down to the local tax assessment office. They can provide you with records of recent property sales. You can use the information therein, such as year built, square footage, number of rooms, selling price, and date of sale to compare with your own home, and estimate its worth accordingly for yourself.
3. Broker Price Opinion
Now you are ready to go deeper, and it’s time to involve an expert. Get in touch with one or more local real estate agents and/or brokers, and ask for a Broker Price Opinion [BPO].
Remember that a BPO is not as comprehensive as a professional appraisal but it can help you come up with a value for your home, especially for listing purposes.
4. Competitive Market Analysis
A Competitive Market Analysis [CMA] is similar to a BPO in that they both include the real estate agent’s own estimate of your home’s value. However, a CMA relies on the recent selling prices of properties similar to your home in your area.
5. FHFA House Price Index Calculator
It is still a quick estimate of your home’s worth but it doesn’t hurt to use the Federal Housing Financing Agency’s House Price Index [HPI] calculator. It uses an approach more scientific than AVMs, and an easy way of getting an estimate for how much your home may have appreciated since you first bought it.
6. Insurance Company
Like the local tax assessment office, insurance companies in your area can also be valuable sources of data on real estate sales. Ask them for a property profile, and you will gain a list of comparable properties with information on their individual, specific aspects.
7. Comparable Properties
In addition to agent appraisals and online tools, you can also evaluate comparable properties in your area to determine the market value of your home. Look for homes with a similar size, condition, and upgrades. Where there are differences, adjust the values accordingly. Use at least three comparable properties, if not more, to get an estimate closest to your home’s actual worth.
8. Professional Appraiser
All the data and math involved in determining the value of your home can begin to seem overwhelming, especially if at the end, all you have are a few rough estimates. In such situations, it pays to hire a professional appraiser. They will collect and process the data, do the math and all the hard work, and present you with a good, reliable estimate of your home’s market value
9. Local Newspapers
Information on property sales is often published by local town, city, and county newspapers. Browse the real estate section for the data you need but do remember that you will need to fill in the blanks by contacting a real estate agent or the tax assessment office for complete information.
10.By the Square Foot
If you feel that property price comparisons are too imprecise, you can opt to compare the price per square footage. Again, this will give you only a rough estimate but putting together all the data from the sources mentioned here should provide you with a highly reliable value for your home.
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