After much thought and consideration, you’ve started looking for a new place to call home. As you spend time searching the housing market, you need to know what your home is currently worth. Knowing how to determine the value of your home will not only help you decide whether or not to sell your home, but it will also give you a guideline for the price your home can sell for once it’s listed. Fortunately, there are six different ways to help determine the value of your home.
1. See recently sold or listed homes in your area
A great first step to determining the value of your home is to look at recently listed or sold homes and comps in your area. This will give you an idea of what similar homes nearby are currently worth.
“When considering comparable sales, pay close attention to homes that have sold within the last 30 to 90 days and check for factors such as school district boundaries, as properties on the same street can be classified in different districts and have vastly different values. Going beyond square footage and considering these location-specific details can give you a more accurate estimate of a home’s value.” – AL Homes Team
It is important to find a home with similar square footage and comparable amenities to the home you are trying to sell. Depending on the features your current home has, looking at a home that is significantly larger or has more amenities may not reflect the home’s value. When you research a home on a site like Redfin.com, you’ll see “similar homes for sale nearby” at the bottom of the page that you can use for comparison.
Once you’ve narrowed down the list of homes in your area to homes with similar characteristics, sales price, list price, and days on market are most important. This will give you an idea of the pricing strategy in your area. You should also look into the condition of these homes and compare them to your own. For example, these homes may have upgrades that your home doesn’t have. Depending on what features you see in these homes, you may want to consider updating them before putting your home on the market. Redfin Concierge Services can help you improve your home before you list it.
2. Use the FHFA Home Price Index Calculator
You can also use the FHFA Home Price Index Calculator to determine your estimated home value. The FHFA Home Price Index Calculator generates an estimate based on the average appreciation rate of all homes in an area.
To calculate your home value estimate, you need to know the purchase price of your home and the month and year you purchased your home. Unlike more comprehensive online appraisal tools, FHFA does not take into account market conditions, potential home improvements, and other factors that can increase or decrease a home’s value.
3. Get a quote for your home with Redfin
Another option for determining the value of your home is a home valuation formula like Redfin Estimate. Redfin Estimate gives you the most accurate estimate of your home’s value online. This estimate is based on the latest data from the Multiple Listing Service (MLS). When you apply for a home on Redfin.com, you’ll also receive a monthly Redfin estimate of your home’s value. This monthly update will keep you informed of changes in market conditions so you can decide when is the best time to sell your home.
Like other home valuation tools, the Redfin Estimate is different from a formal home appraisal or conversation with a real estate agent. When you hire a home appraiser or speak with a Redfin agent, they consider home improvements and unique features that may be missed by home valuation algorithms. You can also ask your real estate agent to review Redfin estimates when determining the value of your home.
4. Ask your Redfin agent to provide you with a home value report.
It’s important to have your real estate agent’s expertise factor into your time when determining the value of your home. With a Redfin agent, we can provide you with a free home value report, also known as a comparative market analysis. You may be wondering what exactly comparative market analysis is.
Comparative Market Analysis (CMA) is the evaluation of a home’s value based on similar homes that have recently sold in the same neighborhood (referred to as comparable properties). A Redfin agent evaluates your home’s current condition, unique features, location, and size compared to comparable homes to determine your home’s value in current housing market conditions. You can see recently listed or sold homes in your area, but determining a home’s value requires the expertise of an agent.
5. Get a home appraisal to determine the value of your home
Along with Redfin’s home value report, home appraisals are one of the most accurate ways to determine the value of a home. A certified appraiser considers a variety of factors that can affect the estimate of a home’s value. Your home appraiser will look at your home’s size, location, the condition of the home’s interior and exterior, additional features such as waterfront views or a large garage, and updates such as brand new appliances or recently renovated bathrooms. Once you have your home appraised to determine its value, you can decide whether to sell your home as is or work on projects to increase its value.
6. Be objective when estimating home value.
When selling your home, you may be tempted to overestimate the value of your home. As a result, your home may sit on the market longer than you expected. Therefore, it’s important to remain objective when learning how to determine the value of a home. You may put more value on a home because of the emotional value and memories associated with living in it, but those don’t translate into the actual value of your home.
Keep in mind that the value of your home is determined by a variety of factors, including market conditions, sales prices of comparable homes in your area, style, size, and age. Ultimately, the value of your home is determined by how much a buyer is willing to pay. Following these six tips on how to determine the value of your home is an essential part of preparing your home for sale.
