How to Figure Out What Your Home is Worth

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Looking to sell your home? Perhaps you’re just curious to know how much your place is worth in today’s market. There are things that you can do on your own to get a sense of your home’s worth.

Sure, free home evaluation tools can help but these are only estimates so your home might sell for more or less than the stated figures as there are many other factors to consider as well.

Perhaps the local schools have improved or you added a new patio deck. Or maybe the local real estate market has recently cooled off due to a slowing economy. No home evaluation tool can capture all of those factors perfectly.

At the end of the day, the price that a buyer pays for your house is what matters. A good real estate agent will ensure that your house is marketed well and will negotiate good offers for you.

Now, all that being said it’s nice to have a ballpark figure of your home’s worth so that you get a rough idea of how to price your home. Here are a few different ways to answer the question of “How much is my home worth?”

Home Improvements

What are things that are unique to your home? Maybe you’ve finished the basement or recently done some landscaping work.

Perhaps you’ve added a new island to the kitchen or replaced the cabinets. Some of these items may add additional value to your home.

Generally speaking, even with said improvements, your house will fall within a specified range of the price of similar homes in your neighborhood. Location, location, location. A good real estate agent can prepare a comparative market analysis (CMA) for you with data easily obtained from MLS (a multiple listing service).

This service will help you find a few “comps” in your area – similar homes that have sold or at least under contract within the past 6 months. Your home will most often be sold at a price that is close to the average price of these homes, again, depending on the condition of your home.

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Use a Real estate Agent

Real estate agents combine qualitative and qualitative analysis along with their own experience and knowledge of the local real estate market. You can conduct your own research about a health issue online but you’re still going to see a doctor at the end of the day for a professional opinion.

The opinion of a local real estate agent will greatly benefit you as well. Licensed real estate agents have access to the aforementioned MLS data that is needed to properly conduct a CMA.

This is accurate and frequently refreshed data that reflects the competitive local real estate market conditions in your neighborhood at any given time so it’s your best bet for obtaining an objective market value of your home.

More importantly, a local real estate agent knows the neighborhood. From many perspectives. They know the local stores and schools, and can even tell a prospective buyer the real commute times from the neighborhood depending on traffic.

A good listing agent will provide you with a realistic valuation of your home and help you get the best offer possible.

Get an Appraisal

Typically, appraisers are hired by buyers looking to get an objective evaluation of a home they’re interested in purchasing.

However, there is nothing stopping you, the seller, from hiring an appraiser yourself. To be fair, it’s not cheap as it will cost you $300-$400, but you’ll benefit from having a local professional help determine what your home is worth so that you’re prepared to price your home effectively.

Some may argue that a home appraisal is more official because, after all, mortgage lenders base their lending decisions on the appraised value, not necessarily, the price listed on the contract.

home worth dollars in

Set Goals

The vast majority of people want to get the highest price for their home in the shortest amount of time. But perhaps that’s not the case for you.

Maybe you’ve been relocated due to you or your spouse’s job and you need to sell your home quickly, in which case you probably should price your home on the lower end of a specified range.

The same is not necessarily true if you have plenty of time. Pricing your home higher than its true market value may end up backfiring as potential buyers may decide to go with other homes in your area. A good agent will help you price your home so that you receive fair and fast offers that reflect the true value of your home.

Understand Your Local Market

Are you in a “hot” neighborhood that is coveted by buyers due to its proximity to certain parks, landmarks, schools or downtown commercial areas? Then perhaps you can price your home on the upper end of your agent’s recommended range.

But keep the competition in mind. If there are many homes in your neighborhood, then a buyer has more leverage as he/she can choose amongst several options. Conversely, if there are relatively few home for sale in your neighborhood, then you can be a little aggressive in your pricing.

Finally, consider your home’s condition relative to the competition. Is your home newer or older? Have you made noticeable improvements to your home? How about the neighbors?

As you can see, there are a lot of factors to consider but try to see your home through the eyes of a potential buyer.

Most people should be able to sell their home in a month or two at a fair price. Contact us if you’d like to consult with one of our local agents for free.