“Real estate is an imperishable asset continuously increasing in value. It is the most solid security that human integrity has ever created, with all the basics of security and indestructible security.” Russell Sage. It is always a big decision, and sometimes it can feel like it’s a giant mountain task when it comes to the best way to buy a house or selling your home, especially if you don’t know where to start. It would be your absolute worst nightmare if you sell your home way below its value or buy a house that is not worth that amount you paid. To avoid all these inconveniences, I know you may be wondering what the right price is?
If you don’t know how to determine the value of your home. Then you are not alone. It would shock you knowing how many homeowners are entirely clueless about what their homes are genuinely worth.
For you, don’t just be a typical homeowner. In this article, we will look at five different ways to determine the value of your home.
Use online valuation tools
With the help of modern technology searching “, how much is my house worth?” you will get dozens of home value estimators. These tools are programmed and automated with valuation models, which lenders and real estate websites typically give.
These tools use public records such as tax assessment reports, title deeds, property transfers, along with some mathematical modelling to help them predict almost the exact value of your home based on your recent locality sales and your description.
Get a broker price opinion or a competitive market analysis
When you dig deeper into your home value, it is always good to ask your local estate agent for a broker price opinion (BPO). Although it does not have as many details as a professional appraisal, a BPO combines agent evaluation of the home and the current market to provide a listing purpose. Like BPO, competitive market analysis (CMA) also provides a recent sales value of similar properties around your area and an agent estimate value. However, a CMA relies more on the latest sales value in your area.
Use an FHFA house price calculator
If you are not confident with AVMs, you still need a quick estimate of house appraisal value. Then the Federal Housing Financing Agency house price index calculator uses a more scientific method. According to Will Doerner, the tool uses millions of reports of mortgage transactions, and the FHFA tracks house changes in value from one sale to the next gathered since 1970. And then, the calculator fluctuates in value given the current market trends.
Hire a professional
Often lenders require a house appraisal value before they approve to finance any mortgage. However, as a homeowner, you can consistently hire a private appraiser to investigate the value of your home. According to the latest statistics, more than 30% of Americans employ an appraiser to have their homes value an appraisal survey. A market appraiser evaluates the market price of the home’s religion, the improvements made on the property and other comparable sales listings.
Evaluate comparable properties
Both the appraisals and AVMs depend on the latest sales value and comparable properties within a specific locality. This is reflected on the recent statistics that suggest 60% of homeowners in the USA use this method as the best way to buy a house and sell their home. Most people prefer this method since it is easy and it does not involve any actual calculations. All you need to do here is
- Look for a site where MSL listing is displayed and find the recent sales price
- If there are no recent sale look listing prices, however, keep in mind that they should be realistic
- Take at least three comps to come up with a more likely price range
Why it matters
Knowing the value of your home or a property that you are looking forward to buying helps you evaluate what you can afford to buy and what you cannot. Additionally, it means greater control over property processes like taxes which are always open to appeal. Also, it helps in refinancing your home equity lines of credit, insurance.