✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
18% of sellers overprice their homes and are forced to lower their asking price. As a result, they waste valuable time and lose out on potential offers. 75% of buyers have overpaid for their homes and now struggle to repay their mortgages. 73% of homeowners make costly improvements that don’t increase their home value.
These statistics prove that not knowing your home’s worth has a direct result on your financial bottom line.
📞 Want To Know! How Much Is Your House Worth?
Houzeo Home Value Estimator Will help you to determine your home worth.
Calculate Here!
What Is Home Value?
Home value is the estimated worth of your property in the real estate market. It is the price at which a buyer is ready to purchase your house.
In a seller’s market with high demand and limited inventory, house values tend to rise. However, in a buyer’s market with low demand, values may decrease or remain stable.
Location, size, amenities, market conditions, and other factors affect home value. These factors are crucial for you to determine the listing price of your home.
Why Is Knowing Your Home’s Worth Important?
Understanding your home’s worth can help you to:
- Diversify Investment: The value of your home contributes to your overall wealth and can build equity over time. It helps you make informed decisions regarding rental income and loan collateral.
- Sell or Refinance: Home valuation helps you set the right listing price, attracting buyers, and offering negotiation leverage. When refinancing, home value helps to determine interest rates and loan-to-value ratios and secure favorable terms.
- Calculate Property Taxes: Property taxes are usually determined by assessing a property’s value. Local governments use property values to calculate tax assessments.
- Determine Insurance Coverage: Replacement costs and coverage are often tied to the home’s value. Accurate valuation helps ensure proper coverage in case of damage or loss.
- Make Renovations and Improvements: Home value helps you to determine which renovations are too expensive or come within your budget. You can also decide what changes or upgrades to make in your house.
- 🛠️ Tip: Certain renovations like kitchen remodels and adding a deck can increase the value of your home. If you have the budget, make these upgrades and see your home value skyrocket.
How to Find the Value of Your Home?
You can follow these methods to find the value of your home:
- Use a Property Value Estimator: Online real estate valuation tools such as Zillow, Redfin, or Realtor.com provide estimated property values based on various data points. These include recent sales in local areas, market trends, and other factors.
- Get a CMA Report: A real estate professional can provide Comparative Market Analysis reports based on recent sales of similar properties. This would help you determine a competitive listing price for your home.
- Check out Similar Properties: Research recent sales of similar properties in your area. Look for homes that are comparable in terms of size, age, condition, and location. This gives you an idea of what similar homes are selling for and helps you estimate the worth of your house.
- Hire an Appraiser: Home appraisers are professionals who assess the value of properties. It includes evaluating the home’s current condition, the neighborhood, market conditions, and comparable house prices. Also, they will provide you with a comprehensive appraisal report.
What Factors Affect Your Home Value?
Several factors can influence the worth of your house. Some of them include:
- Location: Living close to schools, parks, and shops, along with public transportation, can make your home worth more.
- Size and Layout: If your property has more bedrooms, bathrooms, and overall square footage, it may appeal to potential buyers.
- Amenities: Homes with desirable amenities like having a pool, fireplace, or renovated kitchen can make your house worth more.
- Market Conditions: Real estate market conditions can significantly impact your home value. Property values tend to rise in a seller’s market, while they may fall in a buyer’s market. Also, supply and demand dynamics, interest rates, and economic factors play a role as well.
- Comparable Sales: Comparable sales, or “comps,” are the prices at which similar homes in your area have recently sold. These sales provide a benchmark for determining the fair market value of your property.
- Home Improvements: Home improvements, renovations, and upgrades can positively impact your house value. However, do consider the cost and potential return on investment before undertaking any major projects.
- Curb Appeal: Your home’s curb appeal, including its exterior and landscaping, can increase your home’s value.
Bottom Line
Home value serves as an important factor in financial decisions, property management, and market understanding. It helps you plan renovations, pay taxes, and get adequate insurance. However, it is important to determine the worth of your house correctly.
👉 What Is the Value of My Home: Check your home’s worth today!
FAQs
How often should I check my home's value?
It is recommended to check your home's value at least once a year to stay updated with the current market trends and make informed decisions.
Why use a home value estimator tool?
Home value estimators provide quick and convenient estimates. They are based on market data, property characteristics, and recent sales. They help sellers get an idea of their property's worth. Moreover, buyers can determine if they are overpaying for the property.
How often do home values change?
Home values can change frequently. It depends on various factors such as market conditions, demand, and property improvements. Regular monitoring can help you stay informed about changes in your property's value.
Why is it important to know my home’s value?
Knowing your home's value is important to make decisions about refinancing, selling, renovating, and managing property taxes and insurance premiums.
