The value of your home is a key consideration when you’re making plans to sell. There are a handful of ways you can find home value. Learn the potential benefits and drawbacks of each option
How to determine home value and why it matters?
Dated: September 19 2021
The value of your home is a key consideration when you’re making plans to sell. There are a handful of ways you can find home value. Learn the potential benefits and drawbacks of each option.
Estimating your home value is a key step for listing your home, dropping PMI, and acquiring new financing for your mortgage.
Different valuation methods are good for different purposes, as well as for different stages in the selling process.
Be sure to compare the benefits and drawbacks of each option, and consider consulting with a real estate professional before you proceed.
How To Find Your Home’s Value
Depending on your reason for finding your home value, there are a few different approaches you can take. Here’s what to know and how to weigh the advantages and disadvantages of each.
Online Valuation Tools
Online valuation tools like the Zillow Zestimate and the Federal Housing Finance Agency (FHFA) house price index can give you a general idea of what your home might be worth based on a few assumptions.
Zillow comes up with an estimate based on a proprietary formula that uses public and user-submitted data. The FHFA, on the other hand, provides an estimate based on when you purchased the home and the average appreciation rate in your area between then and now.
Use Comparable Homes
A common way to estimate the market value of a home is using “comps,” or the recent sales prices of comparable homes in the area. For example, it may be reasonable that two homes with roughly the same square footage, the same number of bedrooms and bathrooms, and other similar features would sell for about the same price.
To perform a comp analysis, you can check out recent sales using a real estate website that shows multiple listing service (MLS) listings. It’s generally best to use at least three valid comps to get a good estimate.
Request a Comparative Market Analysis (CMA)
A comparative market analysis is similar to a DIY comp analysis, but instead doing it on your own, a real estate agent performs the analysis using multiple data points to pin down an accurate estimate.
Get an Appraisal
An appraiser is a professional who will come to your home and provide a value-based not only on comps but also the condition, features, upgrades, and other factors specific to your home. Lenders typically require an appraisal when you’re purchasing a home or requesting PMI removal.
Annick Timmer is a Multi Million Dollar listings Broker Associate at Allure Realty, A luxury boutique real Estate Firm with Offices in Tampa and Miami. As a long time Florida resident, Annick has....