We pay money for our house, but over time the value of a house can depreciate or appreciate, and this depends on a couple of factors like the market shift in your neighborhood. Few people can reckon with the term “home value”; majorly, people buy their house or put it up for sale. If you are prepared to sell your house, then it is advisable to get it appraised. That begs the question, what is home value? In simple definitions, home value is the amount of money your property will sell for; if it goes to the market today. In other words, it is how much a potential buyer will pay for it. There are different reasons for getting the home valued apart from selling it. Some include refinancing your mortgage or buying the insurance policy of a new homeowner.
We said home value is based on what a buyer is willing to pay for it; this means you can look for someone willing to pay higher for a house, right? But determining the value of a home is more complicated. Remember, the memories you made or money spent on redecorating an old kitchen will not be the same when selling it. Most times, it is the mortgage lender making the final call on the value of a home. Professionals who value a home consider recent home sales in your area and then compare factors that make them similar or different to yours. All these are used to make the final calculation of your home’s worth. But if your property is different from what can be mostly found in your neighborhood, it might not be easy to get your home’s value. Getting a professional home appraisal gives you the unbiased worth of your home.
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How Do I Get My Home’s Worth?
If you are looking to get your home valued for any reason, some tools will easily help you achieve it. Before you look at the steps, here are factors that affect the value of your home:
- Age and condition of your home
- The size of the home and useable space
- Comparable homes sold in the neighborhood
- Renovation and repair
- Economic condition
- Additional gadgets
The above listed are factors that affect the worth of your home. To get your home’s worth; some tools will help you;
● Online Valuation Tools
Online tools like Zillow, Trulia, and the rest can help you determine your home’s worth. They calculate the worth based on the information you provide about your home, coupled with the public information about the location. Online tools are free and easy to use; Also, they can carry out a quick appraisal and give an estimated value of your property. The problem is that it can only provide estimated value and may not consider some features that may appeal to the buyers.
● Using a Realtor
Realtors have their tools for valuing a home, and it is called comparative market analysis. Using a realtor with online tools will give you a fair idea of your home’s worth.
● Use a Professional Appraisal
Using a professional appraisal might not be necessary if you want to know your home’s value, but if you are looking to sell your home, it is important to get an expert opinion. Their job is to conduct thorough research about your home, location and review recent houses sold in your location. But getting a real estate appraisal might be costly, but it doesn’t hurt to get an expert opinion on your property.
● Analyze the Recent Neighborhood Sales
Suppose you have access to a multiple listing service – MLS; you can carry out your comparative analysis with some recently sold homes in your area. You compare the size, location, overall condition of the home, age, and sales history. But remember to put into account the difference between those homes and yours.
Reasons Why You Should Get Your Home Valued
Getting a home valued plays a major key role in buying and selling the home and should be conducted by a professional. Most time, home value is based on comparable sales of another similar home in your area; apart from this, location and the property state also matter when valuing a home.
● Before Selling your Home
If you are contemplating selling your home, then it important to conduct an appraisal of your home. Doing this will help you get a reasonable and realistic price for it. It also improves the chances of getting a buyer for your home. So selling your home calls for an appraisal of the home.
● Applying for Tax Assessment
In most states, property taxes are calculated based on the average market value of your home. If you have a high property tax and your home’s value had since declined in value from when you first bought it, you can get an appraisal done by a professional and call for a tax assessment. It might help lower the amount of your property tax. The tax assessment procedure varies from state to state; it is important to check what it entails in yours.
● Refinancing your Home
When you refinance your home, you are replacing the former mortgage with a new one. This is because the value of your home may have changed since you first bought it. Besides, mortgage lenders always require a home appraisal before granting you a new mortgage; this way, they can ensure that the mortgage is justified. If your home’s value has increased since you first bought it, securing a new mortgage won’t be a problem, but this can be a bit difficult if the value has declined.
● Applying for Loans
In a situation where you are using your loan as collateral for cash or business loan, the bank will need an appraisal to justify the loan. In other words, the amount it lends is supported by the current value of your home.
● Getting a Home Equity Loan
A home equity loan is second to a mortgage; the amount you can get for a home equity loan is based on the amount of equity left after the value of your mortgage has been subtracted from the current value of your home. It is easy to secure if your home has appreciated since you first bought it.