Knowing your home’s market values allows you to determine how to price it, the potential amount of a home equity line of credit, what your refinancing options are and more. It also gives you greater control over how much property tax you’ll pay as those taxes are nearly always open to appeal, and if you can prove the assessment is too high, you may get a lower tax bill.
Unfortunately, there isn’t a universal way to determine Market Values for real estate, although the various options for doing so basically come down to recent comparable sales and home appraisals.
Using an Online Home Values Estimator to Determine the Estimated Market Value
If you search online, you’ll find dozens of different home value estimators, including those that include a seller closing costs calculator, so you can also determine the fees you’ll have to pay if you sell your home. In fact, more than a fifth of homeowners in the U.S. determine their home’s value using an online estimator, according to a 2018 NerdWallet survey. They’re offered by real estate sites like Redfin, using mathematical modeling, tax assessments, deeds of ownership, and property transfers that are publicly available.
Comparative Market Analysis (CMA)
A home value estimator can give you a good idea of your home’s market value, but a comparative market analysis, or CMA, is more reliable. You may have received a flyer or card in the mail from a local real estate offering to provide this document. A realtor in your area can prepare it, often for little or no cost, although that individual is likely providing the service with the hope of being hired as your selling agent. While not as detailed as an appraisal, it will give you a good estimate of value by analyzing active, inactive, pending, and sold listings in the same neighborhood. The active listings aren’t necessarily an indicator of your home’s market value as the homeowner can list their home at the price they hope to get, which may not be realistic.
DIY Comparable Sales
You can determine market value by using the comparable sales approach yourself by taking into account all features of your property. This includes its size, number of bedrooms, and features that affect overall property value, comparing it to other properties that are similar and have sold recently. Start by browsing a site with MLS listings to find the recent sale prices of homes that are comparable to yours in the neighborhood it’s located in. To get a realistic figure with the most likely range of market value, you’ll need at least three valid comparable properties. Once you’ve chosen them, you’ll also need to adjust for differences between your home and those, such as subtracting value if they have fewer bedrooms or an outdated exterior or adding value if it has special features yours doesn’t have, like a finished basement.
An Appraisal
While lenders require home appraisals before approving a mortgage, a homeowner can get an appraisal to determine Market Values at any time. It’s likely to be the most accurate of all the mentioned market values, evaluated on the neighborhood, city, and region your home is located in as well as the characteristics of the house such as the land it’s on and improvements, along with comparable properties.
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