A house is worth whatever someone will pay for it. The long answer depends on the market and whether you’re asking a lender, an agent or a county tax assessor. Knowing how to calculate your home’s value with the help of online tools and trained professionals better prepares you to buy, sell, refinance, tap into your home’s equity or even negotiate lower property taxes. It can also provide a picture of your overall financial health.
Use online valuation tools
Searching “how much is my house worth?” online reveals dozens of home value estimators. In fact, 22% of U.S. homeowners who determined their home’s value used an online estimator, according to the survey. The technical term for these tools is automated valuation model, or AVM, and they’re typically offered by lenders or real estate sites like Zillow and Redfin. Using public records like property transfers, deeds of ownership and tax assessments along with some mathematical modeling, these tools try to predict your home’s value based on recent sales and listing prices in the area. “Most AVMs on real estate sites are generally for marketing and lead generation purposes.” “They’re tasked with returning a value for just about every property even when data is limited. And in doing so, they water down the accuracy.” The AVMs used by lenders and real estate professionals are different. These tools use a “confidence score” to indicate how close the AVM provider thinks an estimate is to market value. A confidence score of 90% means the estimate is within 10% of market value, for example, though each AVM has its own way of calculating confidence.
Get a comparative market analysis
When you’re ready to dive deeper into your home value, you can ask a local real estate agent for a comparative market analysis, or CMA. Though not as detailed as a professional appraisal, a CMA provides an agent’s evaluation of the home and market to provide an estimate of value, typically for listing purposes. Local real estate agents may provide a CMA for little or no cost, but be aware: They may do so with hopes of being hired as your selling agent.
Use the FHFA House Price Index Calculator
If you’re wary of AVMs but still want a quick estimate of what your home is worth, the Federal Housing Financing Agency’s house price index (HPI) calculator applies a more scientific approach. The tool uses the “repeat sales method”. Armed with millions of mortgage transactions gathered since the 1970s, the FHFA tracks a house’s change in value from one sale to the next. Then it uses this information to estimate how values fluctuate in a given market.
Hire a professional appraiser
Lenders require an appraisal before they’ll approve a mortgage, but as a property owner, you can hire an appraiser to estimate home value at any time. More than one-fourth (28%) of U.S. homeowners determined their home’s value through an appraisal, according to the survey. The job of an appraiser is to give a value based on the needs of my clients.” “Sometimes clients want the value for a date in the past, and other times it’s a current market value for a refinance or purchase.”
Among other things, appraisers evaluate:
• Market: The region, city and neighborhood in which a home is located.
• Property: Characteristics of the house, including improvements and the land it sits on.
• Comparable properties: Sales, listings, vacancies, cost, depreciation and other factors for similar houses in the same market.
Evaluate comparable properties
One thing appraisals and AVMs have in common is their reliance on the recent sale value of comparable properties, often called “comps.” Well over half (56%) of U.S. homeowners estimated their home’s value by looking at comparable properties. On its face, this approach seems simplest. Pulling comps is one way to determine market value without paying an appraiser, but use good judgment. “Just because the property next door sold doesn’t mean it’s a comp.” To choose accurate comps, you must employ an “apples to apples” approach. Think about which properties would interest a buyer if yours weren’t available. Look for similar size, location, condition and upgrades.
Why Home Value Is Important
Knowing your home’s value allows you to evaluate what you can afford, determine whether a listing is priced appropriately and decide how to price your own home. And the benefits of finding a home’s value don’t end with a purchase or sale: Refinances, home equity lines of credit, insurance premiums and annual property taxes are all based on home value. Determining your home’s value means greater control over these processes. Property taxes are almost always open to appeal, for example. If you can prove an assessment is too high by pulling comps, you may be rewarded with a lower tax bill.
How To Get Your Home Valued For Free
If you want to sell your house, you need to get an idea of how much it is worth. This will let you know how much you can expect to gain from selling and help you decide on an asking price. Doing some research yourself can give you a good idea of what your house might be worth. It is also likely to be much cheaper than getting a valuation from an estate agent.
Use an online real estate agent
Some online real estate agents offer a free valuation service. You can also use an online estate agent to sell your house. Their fixed fees can work out much cheaper than traditional estate agents’ charges.
Get an online valuation
As well as online estate agents, some other websites can give you an approximate valuation. They are not as reliable as professional valuations, but they can give you a general idea of how much you could sell your home for. Just type in your postcode and other details such as how much you bought your home for, when you bought it, and your email address. A figure will then be quoted to you as a rough guide to how much your home is worth now, plus detailed information about the area and the amount homes are sold for. Property Price Advice allows you to enter as much detail as you can about your property to make their estimate more accurate. They can then provide an average, upper and lower valuation of your property. Free online valuations may not give you a 100% accurate quote on your property’s value, but they can at least give you an idea of what you can expect to sell your home for. If you gather information from all these different sources, you will be able to decide on a realistic asking price. It will also give you some background knowledge of the prices in your area, so that if you end up using an estate agent, you will already be well-informed when you discuss your home’s value with them.
How Long Does A Home Valuation Last?
When you place an order to have a valuation done on your house, it can take as much as a few weeks or as little as a few days to get an expert appraiser to perform a full valuation on your property. The time it takes before the appraiser arrives on your property depends entirely on the company you use. If you’re buying or remortgaging a property, a lender would normally have an independent surveyor assess the property.
How Long Will It Take For An Appraiser To Perform A Valuation On My House?
The time it will take for a property appraiser to perform a complete valuation of your property will depend on the particular appraiser as well as the size of the property. It also depends on the level of appraisal that is to be done on your property. Normally, an in-depth survey may take anywhere from 50 minutes to two hours. Meanwhile, for a valuation, the appraiser may only take as little as 10 minutes or as much as 30 minutes. The time it takes to complete the valuation depends on the size of the property, how difficult or easy the property is to measure, and if the house has peculiar features that would need to be carefully investigated by the appraiser.
Can I Get The Estimated Value Of My House Immediately?
It is normal to find property owners eager to find out what they’re property is worth once the appraiser has performed the on-site valuation of the property. Often, the appraiser will be unable to provide a figure instantly because the on-site inspection of the property is only the first stage of many the property expert will have to go through before a final estimated value is arrived at. Once the on-site inspection of your property is complete, the appraiser will inspect properties similar to yours within the same area. This is necessary to compare your house to other houses in your vicinity. The appraiser will look at the value of these other houses based on the prices they have sold for recently, usually within a time frame of three to six months. Upon completion of the field work, the appraiser will complete his report and you’ll be able to get your figure within 1 to 3 days. If you’re remortgaging or interested in buying a house and the mortgage lender has an appraiser perform a valuation, you may not be given a copy of the valuation report. Even if you pay for it, you may not have access to see what the surveyor has said or written about your property. However, this is not always the case.
How Long Will It Take Before A Home Valuation Report Expires?
There is no official expiry date placed on a house valuation report once the property is on the market. The period of time in which a valuation report is valid depends on any number of factors including the nature of the market. Ideally, your valuation report should not be older than 3 months when you put your house on the market. For a property that has been on the market for a considerably long period of time, it may be necessary to obtain a refresh valuation report. To get a refresh home valuation may cost a fee determined by the surveyor or appraiser. In some cases, the appraiser will waive the fee and update the valuation report free of charge. However, if there is a fee to be paid, the potential buyer and the owner of the property will have to come to an agreement on who will pay. It is possible to take a property off the market for as long as a month and put it up again without performing another valuation on the property.
What Am I To Expect During A Home Valuation?
A property valuation is performed to provide the mortgage lender with enough information to determine the amount that should be offered for the mortgage loan as well as how safe it would be to lend on the property. The appraiser will have to take their time to look around your property to come up with an appropriate figure for its estimated value. They are also likely to ask you questions and talk to you about their associated mortgage providers or real estate agency. All of these add to the cumulative time it would take to get the entire exercise done. For a simple valuation without a full survey, the appraiser will not go in-depth but will judge the value of your house based on what he can see of its condition as compared with similar properties to yours. The agent will want to find out from you what price you initially purchased the property for, how long you’ve owned the property, as well as the nature of any renovations you may have done on the house. They would also want to know what kind of problems the property has, if any. Failure to be honest when answering questions about the state of the house may eventually lead to delays in the process or even the transaction falling through.
Tips to Increase Your Home’s Value
• Plan your remodel: Whether you just bought a house or you have lived there for a while, the fastest way to increase your home’s value is by making a plan. You will fare better if upgrades are made intentionally and not on impulse.
• Start slowly: If your home is new, get to know it. If you have already been there a while, get started. List the things you want to change and the updates you would like to make. Don’t worry about organization, just write it all down. Take a guess on how long you may want to live in the house. If you’re planning on selling, talk to your realtor and make a selling plan.
• Small improvements can really pay off: Are you torn between improving your home’s decor, versus making upgrades you know will increase your home’s resale value? Many homeowners are surprised to hear that doing a little bit of both will actually pay off.
• Clean your house now for profits later: If your house is on the market, a bright and sparkly home can attract buyers like a magnet. A house can never be too clean. If you were a buyer, would you choose the house that is slightly dingy or the home down the street that is clean and welcoming? By making a clean house a priority, you do several things at once. First, you stay on top of maintenance issues, spotting potential problems before they become expensive ones. Secondly, you don’t allow dirt and junk to build up over time. Things like mold can become a nuisance if allowed to spread unchecked. Finally, a clean house is healthier for you and your family.
• Pay down the principal on your loan: As you make all those home improvements, don’t forget the cash. Your financial strategy can boost your home value in a big way. Many different loan features can be added together to give someone a loan that is comfortable for them; give them an opportunity to do home improvements and to invest in their future. Don’t overdo your down payment. If you spend all your money in a down payment, you may not have enough to do the improvements you want. Don’t rush into your home loan, as there are dozens of types. The strategy that you develop for the type of loan you want depends on where you see yourself in five or 10 years. Managing your debt payment with an interest-only payment will give you an opportunity to save that money for retirement or save it for a college fund.
What Does an Appraiser Do?
A real estate appraisal can let you know whether the amount being asked is a fair purchase price. An appraiser’s job is to determine the current value of a property for the potential buyer. Most of the work to determine the value of a real estate appraisal is done during an on-site inspection, where the appraiser will:
• Conduct a room-by-room walk-through to appraise the condition of the interior
• Walk the length of the real estate property for an appraisal of the condition of the exterior
• Appraise the value of any amenities, such as a swimming pool, finished basement, or built-in bar
• Note any health or safety code violations for the appraisal report
• Record the layout of the property, inspect the square footage, and determine whether or not it’s a single-family dwelling
• If you’re buying commercial real estate, a property appraiser may conduct a business valuation to determine market value in much the same way.
• Off site, the appraiser may also evaluate the current real estate market, considering comparable properties in the neighborhood, to help evaluate the home’s value or fair market value of the property.
• A home appraiser will report on the value of similar properties in your area, so you can determine whether your upcoming real estate transaction is a smart one.
How Do You Know If An Appraiser Is Qualified?
Typically, your lender will choose an appraiser. The appraiser should be licensed by the state or have other certification—the Appraisal Foundation, for example, has been authorized by Congress to set qualifications for becoming an appraiser. However, not all states require appraisal certification, so do some researches into appraisal value before you start.
How Long Does An Appraisal Take?
One or two hours is the average time spent for most property appraisals. You should receive the report in an average of three to seven business days. The amount of time it takes to complete an appraisal can depend on the type of report, the size of the property, and other factors.
What Are The Benefits Of An Appraisal?
Think of the appraisal as an investment of your time, money, and effort. It is important to know what your house or real estate is worth, and an appraisal will help you get your loan approval. Hopefully, this step and the rest of the house-buying process will go smoothly.