After lots of thought and consideration, you’ve started to look for a new place to call home. As you spend time searching the housing market, you’ll need to know what your current home is worth. Knowing how to determine your home’s value will not only help you decide whether you should sell your home, but it will give you a guideline for the price your home may sell for once listed. Luckily, there are six different ways to help you determine your home’s value.
1. Review recently sold or listed homes in your area
A great first step in determining your home’s value is to look at recently listed or sold homes in your area. This will give you an idea of what the going price is for similar homes nearby. It is important to look for homes that are similar in square footage and have comparable amenities to the home you are preparing to sell. Depending on the features your home currently has, looking at homes that are significantly larger or have different amenities may not reflect the value of your home. When looking at homes on sites like Redfin.com, you’ll find “similar homes sold nearby” at the bottom of the page that you can use for comparison.
Once you’ve narrowed down homes in your area to those with similar characteristics, the most important things to look at are sold price, listed price, and days on the market. This will give you an idea of the pricing strategies in your area. You should also look at the condition of these homes to see how your home compares. For example, maybe these homes have upgrades that your home doesn’t. Depending on what features you find in these homes, you may want to consider making updates before listing your home to sell. Redfin Concierge Service can help you with any home improvements prior to listing your home.
2. Use the FHFA house price index calculator
You can also use the FHFA house price index calculator to determine your home value estimate. The FHFA house price index calculator generates an estimate based on the average rate of appreciation of all the homes in your area.
To calculate your home value estimate, you will need to know the purchase price of your home and the month and year you bought your home. Unlike more comprehensive online valuation tools, the FHFA does not take into account market conditions, potential home improvements, and other factors that may increase or decrease your home’s value.
3. Get a Redfin Estimate of your house
Another option for determining your home’s value, is a home valuation formula, like Redfin Estimate. With Redfin Estimate, you’ll get the most accurate online estimate of your home’s value. The estimate is based on the most up-to-date data from the multiple listing service (MLS). By claiming your home on Redfin.com, the Redfin Estimate of your home’s value will also be sent to you monthly. This monthly update will inform you of any changes in market conditions, allowing you to determine when it is the best time to sell your house.
Like other home valuation tools, the Redfin Estimate is not the same as a formal home appraisal or speaking with a real estate agent. When you hire a home appraiser or speak with a Redfin Agent they take into consideration any home renovations or unique characteristics that a home valuation algorithm may miss. You can also ask your real estate agent to review your Redfin Estimate as they determine your home’s value.
4. Ask a Redfin Agent to provide you with a Home Value Report
As you spend time determining your home’s value, it is important to have your real estate agent weigh in with their expertise. With a Redfin Agent, they can provide you with a free Home Value Report, also referred to as a comparative market analysis. You may be wondering, what exactly is a comparative market analysis?
A comparative market analysis (CMA) is an evaluation of your home’s value based on similar, recently sold homes, referred to as comparables, in the same neighborhood. Your Redfin Agent will evaluate your home’s current condition, unique features, location, and size to comparable homes in order to determine your home’s value in the current housing market conditions. While you can review recently listed or sold homes in your area, you’ll have your agent’s expertise in determining your home’s value.
5. Get a home appraisal to determine your home’s value
In addition to Redfin’s Home Value Report, a home appraisal is one of the most accurate ways of determining your home’s value. A certified appraiser will take into consideration a variety of factors that can affect your home value estimate. The home appraiser will look at the size of your home, location, condition of both your home’s interior and exterior, additional features such as a waterfront view or large garage, and updates like brand-new appliances or recently renovated bathrooms. Once you have your home appraised to determine your home’s value, you can decide whether to sell your home as-is or take on a project to increase your home value.
6. Remain objective about your home value estimate
When selling your home, you may be tempted to overestimate your home’s value, which could result in your home sitting on the market for longer than you like. Therefore, it is important to remain objective when you are learning how to determine your home’s value. While you may put more value into your home because of sentimental value or memories associated with living in your home, those do not translate to your home’s actual value.
Remember that your home’s value is determined by a variety of factors – market conditions, the sale price of comparable homes in your area, and the style, size, and age. Ultimately, your home’s value is determined by what buyers are willing to pay. Keeping these six tips on how to determine your home’s value is an integral part of preparing to list your home for sale.