How much is your home worth?
It’s a common question many homeowners have, particularly if they’re thinking about selling it. This is usually something people rely on a realtor to help them figure out during the selling process, but what about people who aren’t quite ready to hire a realtor or those owners that have decided to do it on their own?
Several factors go into determining the value of a home, and while you may not have the experience and skills of a real estate agent, the following can be a brief guide to get you started.
What many people unfamiliar with real estate don’t realize is that their home, or the structure that sits on a piece of land, actually tends to depreciate over time, which means its value goes down. So why is it that homes almost always become more expensive over the years?
That’s primarily because the value of the land goes up. The land is generally considered an appreciating asset, so only looking at the size, style or beauty of your home isn’t in and of itself going to help you hone in on the right price. You have to focus on the neighborhood, the size of the lot your home is on, and how much land values in your area have gone up.
Any realtor will tell you the price of a home is almost entirely based on the comps unless it’s a very unusual circumstance. This means finding your home’s value is going to require some research. Don’t look at the homes currently for sale in your neighborhood or immediate area, because it’s not listing price that’s necessarily important. Instead, research recent transactions, over a period of about six months or so. This will show you how much homes in the area have actually sold for, as opposed to the listing price.
A lot of what drives home prices up or down has nothing to do with the homes themselves or even the area. It’s also reliant on the overall market. The market can refer to the neighborhood, the city, the state or even the country as a whole. Along with researching nearby transactions, you should also have a good idea of the local and national real estate market and recent trends when determining the value of your home.
Find Similar Individual Homes
While most of the considerations that go into the valuation of a home are more about general trends, once you’ve done your research you can start honing in on a more specific price. This can be done by looking at homes as close to yours, in location, style and size, that you can find that have recently sold.
Think about the age of the house, the size, the size of the property it sits on, the general condition, the amenities and any recent updates it may have undergone. You can then start formulating a more precise value for your home, adding or subtracting based on the individual differences you may find between your house and the handful you’re comparing it against.
The tips above don’t represent everything that may weigh into the value of a home, but they’re a good foundation. Some homeowners look to online calculators to determine home value, and while they can be a handy tool, they’re not always as accurate as doing the research much like professional realtors do.