While the past year or more has been a roller-coaster ride on many fronts, there was a silver lining for homeowners: Home prices have risen considerably. You might be wondering if you should take advantage of the climb in values and sell your home or tap its newfound equity. As you consider your options, a good starting point is to ask yourself: exactly how much is my house worth?
When getting a home value estimate, consider the three main types of valuation:
- Fair market value
- Appraised value
- Assessed value
Why House Values Matter
As you can imagine, an important part of buying or selling a home is knowing what it’s worth. And if you’re smart, it might save you a lot of headaches down the road.
As mentioned earlier, there are three basic types of home valuation:
- Fair market value
- Appraised value
- Assessed value
Here’s a brief summary of each.
Fair Market Value
Fair market value is the amount the property is likely to bring in on the market. But because many factors can influence that figure, it can be subject to multiple interpretations.
Market Value
Market value is determined by the sale of comparable properties and is generally a more accurate representation of the market. Some of the data for market value can come from Zillow.
Assessed Value
Assessed value is the dollar value assigned to a home to determine the property taxes of the place.
How to Find Out What Your House Is Worth
1. Use a home value estimator
2. Ask a real estate agent for a free comparative market analysis
3. Check your county or municipal auditor’s website
4. Identify trends with the FHFA House Price Index calculator
5. Hire a professional appraiser
When you use a home value estimator, there are a number of websites and apps that provide free, accurate home valuations. If you have the time, it’s better to do your own home valuations to ensure that you’re getting an accurate number, but if you can’t do it for free or you can’t find a cost-effective appraiser, an estimator can provide you with a ballpark estimate. If you have an FHA loan, you’ll need a federal appraiser, which can run upwards of $1,000.
When you seek help from a real estate agent, commissions may come into play, which you can calculate at by researching the average value in your region.
Homeowners may wonder if you can get a professional to help them determine what they could get for their home. Sure, there are companies that can give you a ballpark estimate (e.g., Zillow, Redfin, and realtor.com). It’s always a good idea to hire a professional to help with valuations.
Conclusion:
In the end, all you’d need is to get a fair value for your home. Plan in advance, so that you don’t rush at the last minute, which may end up in a mess. Do all the research from your side, follow the above steps as well, and you’re sure to get the best price for your home.