How Much Is My House Worth? Ways To Determine Your Home’s Value
Lauren Nowacki5-Minute Read
November 12, 2021
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This very second, you may be sitting in your home, looking around and wondering “How much is my house worth?” And if you weren’t already, you’re likely thinking about it now.
There are many reasons for wanting to know your home’s value. Maybe you want to refinance. Maybe you plan on selling in the near future and want to know how much house you can afford when it comes to buying the next one. Or maybe you’re just plain curious about how much equity you currently have. Whatever the reason, you want to know. And there are ways of finding out.
How Can I Find Out How Much My House Is Worth?
There are a few methods homeowners can use to determine the current value of their home. One of the easiest ways to do this on your own is to use an online home value calculator, but it’s possible to estimate your home’s value using a combination of the following methods.
Get A Professional Appraisal
A home appraisal is a normal part of the home selling process and is typically required for a buyer who’s financing the purchase. An appraisal often provides a more accurate valuation than online tools because it involves a trained and licensed professional actually coming to the home and making a custom estimate based on features specific to your home, like how well you’ve maintained the home, the age of your appliances and systems and the condition of the foundation and roof.
Consult A Real Estate Agent
A professional real estate agent or REALTOR® will be able to use their experience and industry knowledge to provide an idea of the home’s value. Since their business is in your particular area, they’re also experts who know the area and local market and what buyers are looking for in a home.
Compare To Similar Homes For Sale
Comparable homes, or “comps,” are recently sold homes within a certain radius that are very similar to your own home. By comparing them to each other and to your own home, you can get a rough estimate of how much your home is worth and what it will likely sell for. Both appraisers and real estate agents use comps to help determine your home’s fair market value. You may want to work with an agent to get the most up-to-date information and to help you interpret it. Your review may not provide the most reliable estimate, but it can give you an idea of what similar homes in the area are selling for and what selling points you may want to highlight in your listing.
Factors That Affect Home Value
Before you can get an accurate estimate of how much your home is worth, it’s important to understand which elements have the biggest impact on home value. In the mix are factors that you may be able to change and some that you can’t.
Square footage is one of the most important factors in determining home value. To get an idea of the price per square footage of your home, take a look at comparable homes in the area and divide their sale price by their square footage. Then multiply that number by the square footage in your home.
For example, if a 2,000-square-foot comparable home sold for $200,000, the price per square foot is around $100 per square foot. If your home is 2,500 square feet, and the price per square foot is around $100, you could estimate the home is worth roughly $250,000. Of course, there are other factors that affect the price when it comes to home size and design. These include:
- Total number of rooms
- Lot size
- Number of bedrooms
- Number of bathrooms
Condition And Age
The condition of a home will affect its value. If it has foundation issues, a leaky roof or failing appliances, it’s seen as less desirable and expensive to update. Therefore, it’ll be priced lower. Even if everything works, if your home is filled with cabinets, tile and wallpaper from the 70s or doesn’t have central air, it may be priced lower than updated homes. Small updates, even adding a fresh coat of paint, can help raise the value of the home.
You’ll also want to keep the age of your home in mind, too. Typically, older homes may come with old features, like plaster walls, asbestos tile and aging pipes. They may need a little more love and care than newer homes, which may cause them to have lower prices. However, if the home is a historic home, it could be valued much higher than a newer home. That’s because it’s a piece of history and will have been well-preserved and well maintained.
Features And Finishes
People will pay to be spoiled and if your home has extra features or luxurious finishes, chances are your home value will be higher than those without. Such features as additional living space – like a four-seasons room or finished basement – high-end appliances or granite countertops can add to your home’s market value.
The home itself isn’t the only thing that influences its value. Location and neighborhood factors can also play a role. For example, if you want to live in the city, you may end up paying more money than you would for a rural location due to better access to amenities and an easier commute. A home in a top-rated school district may be more expensive than one in a low-rated school district because the area is more desirable, especially for young families. Home maintenance throughout the neighborhood is another location-based factor. If there are multiple foreclosed homes or houses and yards in disrepair or if the area has a high crime rate, nearby homes could see a decrease in value.
The Local Housing Market
No matter the home, the local housing market will influence how much the home is valued at – and what people will be willing to pay for it. For example, if it’s a buyer’s market, you’ll have some competition amongst sellers and buyers will likely negotiate a lower price. On the other hand, if it’s a seller’s market and inventory is low, buyers may be willing to offer above the asking price to ensure they get the home.
When evaluating the local market, consider the number of homes currently for sale, whether it’s a buyer’s or seller’s market and the time of year, which can all influence how much your house is worth.
The Bottom Line
If you’re planning on selling your home soon, knowing how much your home is worth can provide insight into what it will sell for, how much you’ll get from the sale and how much house you can afford when you purchase your next home. If you’re considering a cash-out refinance, knowing your home’s value can give you a better idea of how much equity you can use for things like renovating your home or consolidating your debt.
If you’ve followed our tips and you’re unhappy with how much your house is currently worth, there are ways to increase your home’s value, including remodeling your bathroom or kitchen, adding a fresh coat of paint, replacing windows and doors or even simply adding more curb appeal.
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