How to work out how much your home is worth?

Whether you are about to selling your home or calculating property taxes, you will need to figure out how much your home is worth. Since the value of a home is subjective, it could be a challenging task. A buyer or agent may be willing to pay for it more than others. Knowing how to work out how much your home is worth either with help of professionals or online tools, better prepare you to sell, buy, or renovate your home or negotiate lower property taxes.

In this article, there are some ways you can figure out the exact value of your home or property.

Online valuation tools

When you search ‘how much my home is worth’, the search engine shows a lot of online tools that help you estimate the value of your home. According to a survey, almost 22% of US citizens use online valuation tools to determine the value of their homes. Such tools are usually offered by money lenders or real estate agencies to help their customers know the worth of their properties. Along with property transfers, tax assessments, and deeds of ownership, these tools also use recent property sales and listing prices in the area to predict the value of a home.

Get a comparative market analysis (CMA)

Asking a local real estate agent for CMA or comparative market analysis is another best way to dig deeper into the value of your home. Since CMA is not as detailed as an appraisal, it provides you a close evaluation of the home’s value that can be used for properly listing. Local real estate agents usually provide a comparative market analysis for little to no cost. Most of them provide a free CMA with the hope of being hired as an agent to sell your property.

ARV Method

The ARV or after repair value is the process of evaluating the value of the home or any other property once it has been renovated. The ARV formula can be explained as:

ARV = Property’s Current Value + Value of Renovations

During the process, a real estate agent or appraiser looks at the current value of the home and then adds the value of renovation to find out the exact value of a home after renovation. All the repairs like adding a new bedroom, bathroom or walls are made to chance overall layout of the house that definitely increases its value as well. Real estate agents also find properties or homes in the area that are comparable. It helps them figure out an accurate value. This type of home value evaluation usually works for homeowners who want to sell their homes after making necessary renovations.

A professional appraiser

Moneylenders and financial institutes usually require a professional home appraisal before they approve a mortgage loan for the property owner. This is where hiring a professional property appraiser comes into play. A survey shows that almost 28% of US residents hire professional appraisers to determine the value of their homes. A homeowner who is about to sell his/her home is not required to get a professional appraisal but it could be a great idea to get a quick guess of your home’s value. Professional appraisers are responsible to provide their clients a neutral and well-researched estimate of the home’s value. They complete the process of appraisal by visiting the property in person and then reviewing recent property sales and purchases in the area.

Evaluate comparable properties

Reliance on recent property sales and comparable properties in the area is a common thing between professional appraisers and AVMs (automated valuation models). Most homeowners also estimate the value of their homes by visiting comparable properties around. This is the reason; this approach of property valuation is simplest and affordable as well. Looking at comparable properties is one of the best ways to work out how much your home is worth even without paying a single penny to real estate agents or professional appraisers. However, you should consider several aspects like square footage, the number of bedrooms, bathrooms, and other facilities.

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