Everyone wants to know what their home's value is. Whether you are preparing to sell your home, shopping around for homeowners insurance, or are just curious, home value is an ever fluctuating thing that can be a bit tricky to nail down. Of course, you can always hire a certified professional to estimate your home's value but if you are just looking to get a general idea, hiring a professional is not completely necessary. You can estimate your home's value by examining a few things and taking a few basic steps.
One simple place to start is with comparables. Take a look at your neighborhood, check out homes that have recently sold near your home and see what they have sold for. It is important to not only look at nearby sales, but to look at nearby sales of similar homes to your home. Homes that have similar square footage, bedrooms, bathrooms, yards, and upgrades. There may be a home that recently sold on your street that is the same size but that is completely remodeled and upgraded. If your home has the same square footage and bedrooms, but is 20 years old and has never been remodeled, your home likely has a lower value. Also, keep in mind that you need to compare recent sales because the market is continuously fluctuating and the same house could sell for a completely different price from one year to the next. Take into account your location, school district, distance to area attractions, crime rate and more. All of these factors will influence your home value. If you have made significant upgrades to your home like high end flooring or a pool in the yard, these things will also influence your home's value. For this reason, simply comparing homes in the area by square footage is unreliable.
Additionally, there are websites such as Zillow or Redfin that have home value calculators in which you can input your home's information and they will give you a rough estimate. But, most real estate agents warn that these estimators are often inaccurate. Once you have formulated a general idea of how much your home is worth, if you still need a more specific number, you can hire a professional to come and assess your home's value. Bigger Pockets points out why this is the most reliable method of determining value, especially if you are going to list your home for sale, "Appraisals are generally considered the most reliable home valuation tool. An appraisal is nothing more than one person’s opinion of a property’s value but that person has been formally trained and certified in rendering opinions on home values. The best appraisals are those performed by appraisers who do most or all of their business in the subject property’s neighborhood. We all know how a few blocks can make a huge difference in location, especially in large cities, and thus value. Apples to apples getting a property appraised will generally give you the most accurate value of the home." With your home value determined, you can plan to sell your home, determine what kind of homeowners insurance you need or see how well your investment is paying off.