How much is my home worth? • Benzinga

How much is my home worth? There are several reasons why you as an owner might want to know this information. Maybe you’re just curious. Perhaps you are considering selling the house and want to know how much more it is worth today than it was when you bought it. Or you might have college-aged kids, which means you might have to refinance the house to pay for their tuition and housing. Either way, the question of how much your home is worth comes down to several key variables and data points. Benzinga reviews them below.

What is home value?

The answer to this question is not as simple as it seems. Just as beauty is in the eye of the beholder, the value of a particular home depends on who is doing the appraisal and why. Generally, there are 3 different measures of your home’s value.

Of all the metrics for estimating home valuations, the homeowner’s metric is perhaps the least scientific and the most imprecise. There are several quite logical reasons for this. The first is that landlords generally overvalue their property in the same way that all parents think their child is the cutest. Second, for most homeowners, their home is not only their most prized possession, buying the home is one of the crowning moments of their life. All of this leads to a natural tendency on the part of homeowners to be overly optimistic about the value of their home.

The second metric to consider when appraising a property is perhaps the most important. This is the appraised value of the house according to a licensed appraiser. Appraisers are trained professionals who approach home appraisal from a scientific and data-driven perspective. Mortgage lenders hire them to make sure the home they are going to finance is worth the selling price. Lenders will also use an appraiser in cases where a homeowner wants to refinance the home. Either way, lenders won’t let a buyer or homeowner borrow more money on a home than it’s worth. So, if the appraised value of the house is greater than the proposed loan amount, there is no deal.

The final measure in home appraisals is assessed value. The assessed value is important because it determines the base of the owner’s property taxes. Each county has a tax assessor whose job it is to assess the value of the home and the land it sits on. Once the tax assessor has determined the value of the house and land, a property tax bill based on this determination is sent to the owner. Tax appraisers rely on some of the same information as appraisers, such as the selling price of comparable properties, but not all of it. This is why there may be some difference between the assessed value of a property and its current market value.

Information about your house

The first step in appraising your home or estimating the value of another home you are interested in is to gather as much information about the home as possible. Here are examples of this information:

  • Location of subject property
  • Square feet
  • number of rooms
  • Lot size
  • Number of bathrooms
  • Facilities such as covered parking, air conditioning, swimming pool or terrace

All of this information adds up to determine the value of your property. That said, location, square footage, and number of bedrooms are top considerations for most homebuyers. Generally, the larger your property and the more attractive the area it is in, the higher the value of the home.

Mortgage and Equity

The value of your home on the open market isn’t the only number you need to worry about when estimating its value. You also need to know the equity in your home. Equity measures the percentage of the mortgage you have paid off compared to the amount you owe on the mortgage. So, for example, if you paid off $150,000 on a $450,000 mortgage, you have 33% of the equity in your home. Once you have fully paid off the mortgage, you have 100% of the equity in your home.

Needless to say, the more equity you have in your home, the better off you are as a borrower. Regardless of its estimated value, your current mortgagee will not sanction a sale for less than you owe on the mortgage. If you are estimating the value of your home for the purpose of getting a home equity loan or line of credit, the lender will also not lend you more than the equity in your home.

Market comparison

Once you have gathered the important information about your home, you should start doing a market comparison by looking at what similar homes in the area have sold for recently. You can find this information on the Multiple Listing Service (MLS) or by browsing real estate websites like Zillow and Trulia.

Get an accurate estimate

No matter how much research you do, if you want the most accurate estimate of your home’s current market value, it’s best to turn to a professional. Many licensed real estate agents in your area are eager for inventory for sale and can help you estimate the value of your home. Most of them will be happy to provide you with a free market analysis of your property in hopes of securing a listing deal with you. So, do not hesitate to contact one, or even better, several different agents. They will have the most up-to-date information on recent sales in your area, which will put them in the best position to provide you with the most accurate information on your home’s value.

How to improve the value of your home

While you can certainly improve the value of your home by making major improvements such as remodeling the kitchen or adding an extra bedroom, there are many smaller, more cost-effective steps you can take. Doing small repairs and upgrades such as changing the sconces in the bathrooms or upgrading to recessed lighting in the living room can all improve the value of your home. The same goes for improvements to the exterior of your home, such as painting or improving the landscaping. All of these extra touches cost a lot less than big projects like a new kitchen, but they will go a long way to improving your home’s value and curb appeal.

Making sense of home appraisals

At first glance, the answer to the question of how much is my house worth may seem simple. But it’s actually a pretty complicated question, the answer to which depends on who is asking the question and why? Remember that there can be a significant discrepancy between the market value, appraised value and assessed value of your home. The best way to answer this question is to determine what the purpose of your assessment is and then seek professional advice.

Frequently Asked Questions

How do you know a house is a good deal?

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How do you know a house is a good deal?

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Eric McConnell

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This is a subjective question as there are many definitions of a good deal. If, say, your wife likes the house and it’s in a good school district but it costs a little more than you want to pay, it might be worth the deal – if you can you afford this price. However, if your primary concern is whether or not you’re getting the best value, you might be inclined to pass on that same house. Either way, it’s a good idea to consult with a licensed real estate agent who has experience in the market where the home you want to buy is located. An agent will be in the best position to tell you if it’s a good deal or not.

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Benzinga

How do I know if my house is worth the asking price?

1

How do I know if my house is worth the asking price?

demand

Eric McConnell

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Ideally, your real estate agent has done enough market research to come up with a reasonable price that will attract enough buyers to result in a quick sale. However, you can also use some of the online home appraisal sites to find out if your agent’s suggested asking price is too high or not. Keep in mind here that because real estate agents only get paid after they sell the house, they are not well served by listing it at a price much higher than comparable homes in the area. If you are selling the property without an agent, the same applies to you. If you find that your asking price is much higher than comparably equipped homes in the area, you’re probably asking too much.

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