Despite the ongoing pandemic, housing prices have continued to rise. This is likely due to low interest rates to secure mortgages, and many housing markets today have many more buyers than sellers.
With less homes being listed on the market, homes are selling fast and at high values. Knowing what your home is worth is not only important for listing your home — knowing your home’s value lets you better understand how much equity you’ve accrued through owning your property.
Learn the best way to find your home’s current market value now.
Step 1: Understand the basics of home market value.
Knowing the basics of what affects your home’s market value is the 1st step in understanding your home's current value. At a high level, your home’s value will be calculated by comparing similar properties in your area. Important factors that appraisers and licensed realtors will use to determine the value of your home include the number of bedrooms, bathrooms and square footage of your home.
Square footage doesn’t include your home’s basement living space, even if it’s finished. But a finished basement still affects your home’s value. If you’re comparing your property to other homes without a finished basement, be sure to account for the extra value that your finished basement adds to your property.
Step 2: Get help valuing your home.
While you can get an idea of what your home is worth on your own, the most accurate way to find the value of your home is through a licensed professional. The 2 most qualified professionals to help you value your home are home appraisers and licensed realtors.
Licensed real estate professionals look at your home in a different way than appraisers. Appraisers find the value of your home by comparing your property to recent sales in your area, and then they’ll adjust the value of your home based on your property’s unique aspects.
Some unique factors that will increase your home’s value include premium appliances, updated kitchens, large bathrooms, finished basements and in-ground pools.
Licensed realtors will value your home in a slightly different way than appraisers. It’s a good idea to ask your realtor how much they think your home will sell for before you put your property on the market.
It’s important to not only ask your realtor what they think your house will sell for, but also why they think your property will fetch the price they suggest. Realtors will value your home based on current market conditions, such as the inventory on the market and the demand for real estate in your area.
Step 3: Compare the prices of nearby houses.
Similar properties will be compared to your home based on the number of bedrooms, bathrooms and square footage these homes have. It’s much easier to value a home in a neighborhood with similar home layouts, as these homes will be easy to compare to your property to find an accurate market value from. The more unique your home is, the harder it’ll be to value, as the price you get for your unique property will greatly depend on the buyers in the market when you list your home.
The square footage of comparable properties in your area will be the most important factor in determining your home’s price. Often, you’ll see a metric called price per square foot. This is found by finding the average price sold for comparable properties and dividing by the square footage of these homes.
You can multiply the average price per square foot by the square footage of your home, and you can find an estimated value for your home. Your home will likely be worth more than this average if your property has a finished basement, upscale appliances or more bedrooms and bathrooms than the comparable homes in your area.
Step 4: Get your estimate.
The most accurate way to get an estimate for your home is through a licensed professional. If you’re looking for an estimate for your home’s value as a baseline before you list your home, you can use websites like Zillow and Redfin to give you an estimated home value. But remember, these websites aren’t always up to date with your home’s renovations.
Improve Your Home Market Value
There are lots of ways you can improve the value of your home before you list it on the market. The most important rooms in your house that add value to your property are your kitchen and bathrooms. Updating your kitchen and your bathrooms before you sell your home can add value to your property, and it will make your home easier to sell.
There are also home improvements that don’t typically raise the value of your home, but they’ll make your property easier to sell. Home improvements that make your home more marketable to buyers include fresh paint, a well-manicured lawn and a well-maintained driveway.
Relevant Information for Home Market Value
Home appraisal values play a large role in the process of selling your home. If you’re a homeowner, appraisals are usually the last hurdle to get over before you close on your property. If you live in a housing market with low inventory, some buyers may waive a home appraisal to make their offer more competitive.
However, if a buyer needs a mortgage for your home, the bank will require a home appraisal. If the appraised value comes in lower than the home’s purchase price, then the buyer and seller will need to negotiate who covers the difference, as the bank won’t cover a loan if the home’s value doesn’t appraise at or above the sale price.
Best Home Market Online Tools
There are many online tools you can use to estimate the value of your home before you list it on the market. These websites offer tools for buyers and sellers, including loan approvals, home estimates and they can even connect you to local real estate professionals in your area.
HomeLight
HomeLight is a unique online real estate service that can give you a more accurate estimate of your home’s value compared to its competitors. The website lets you enter specifics about your home, and they can give you an estimate in a matter of minutes.
HomeLight also lets you apply for loans directly on its website. Buyers who need a mortgage for their home need preapprovals before submitting offers, so the homeowner can verify that the buyer can actually afford the home. Without a preapproval, buyer’s can’t make competitive offers, especially when competing with cash buyers.
Redfin
Redfin works differently than other real estate websites, as they’ll connect you with a local real estate professional to conduct a home estimate to find your home’s market value. The platform also lets you browse homes for sale, and it takes data from the multiple listing service (MLS), which realtors use to find homes for clients.
Your Home’s Market Value vs. Sale Price
It’s not uncommon for your home’s appraisal value to deviate from the actual sale price of your home. Some buyers value certain neighborhoods more than others and may be willing to pay a premium for your home if there aren’t other homes listed in your area.
Real estate market conditions also affect how much you can get for your home. If there are more buyers than sellers in a market, buyers will need to send more competitive offers for the homeowner to accept their offer.
Frequently Asked Questions
Q. How do I find the market value of my house?
You can find an estimate for your home's value on websites like Redfin and Zillow. These estimates aren’t going to be entirely accurate. To really know the value of your home, you’ll need to talk with a real estate professional or get your home appraised by a licensed appraiser.
Q. What brings down property value?
There are many factors that can bring down your property’s value. If your home is much more expensive than other homes in your area, then the value of your home will be brought down by these other properties.
If your home is significantly less expensive than surrounding properties, the value of your home will be improved.