How To Work Out The True Value Of Your Home

Posted On Friday, 14 August 2020 21:12

Are you thinking of selling your beloved house? Or are you lazing about on your couch during the weekend, wondering what could be the true value of your home? Well, whatever the case may be, you do have a valid topic to ponder upon. Your house has both financial and emotional value attached to it. There’s so much history attached to those four walls that not enough money can justify the price. But still, banks and brokers do put a price tag on that house. 

So, how do you work out the actual value of your home? To help you with that, we will discuss five ways to determine this. 

1. Use Online Valuation Tools

There’s a 90% chance you stumbled on this article by searching on Google, “How to find the true value of your home?” or something similar. Now, if you look carefully in the search results page, you’ll see many valuation tools or home value estimators. These tools are actually called Automated Valuation Models or AVMs. You can find several AVMs online, so take your time doing research and finding one that works for you. It’s the easiest way to get a property valuation done and to get to know the worth of your house in today’s market. 

2. Through Comparative Market Analysis

You can consult your local real estate agent to get a comparative market analysis. A CMA will draw an estimated value of your property by matching it up with a comparable property near your area or one with similar features. 

3. Find A Professional Valuer

A valuation of the property is a formal report compiled by a professional and registered valuer who has completed their training. This valuation is used by a mortgage lender to make sure the property has acceptable security for a loan. It also makes sure the market value is up to the mark to cover the mortgage in case of a forced sale. This will give you a formal valuation and precise estimation of your property. 

4. Check For Comparable Properties

Since AVMs use the data of recently sold properties that have similar features to your property, you can compare your property value to those already sold. All you have to do is look for recently sold properties near you with a similar size, square footage, features, condition, and age as your house. To do this, you need to add the total sale price of each property, then divide it by the number of properties to find the mean sale price. 

Do the same for the square footage of the property. You must divide the average sale price by the average square footage for the average value of all properties per square foot. Then, multiply this by the number of square feet in your home, and you will get an accurate estimate of the fair market value of your property. 

5. Get In Touch With Your Local Taxing Authority

Get in touch with your local taxing authority and ask them for a copy of the property tax assessment for your home. Along with that, you should calculate the assessment yourself by checking the rate of taxation (a percentage of the property’s value). Now, divide the yearly tax by the tax rate, and you will get the local government’s assessment of the fair market value of your home.  

Bottom Line

It’s vital to gain insight into the true value of your home. This allows you to see what all you can afford, determine if the listing is priced well, and decide how you should price your own home. Along with this, you should consider refinances, insurance premiums, and several other significant processes to find out the value of your house.

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