If you are wondering what your home is worth, there are a few things to be aware of in finding a value. We’ll quickly lay out some important details below for your usage. In a nut shell, there are levels of accuracy in different methods of finding a home value. Less accurate prices are nice because they are quick and take minimal effort to obtain. Highly accurate prices are nice because they are more reliable and targeted, but they come with extra time spent and, in the case of an Appraiser’s assessment, expense. Below we will start from least accurate to most accurate and explain where each might be handy.
Before starting, here is a link to an Address Based analysis of home value for you to try out:
This will help with the explanation of the following items to give a quick home valuation.
Level 1 – Address Based Analysis. The concept is that you enter you home address, the program immediately searches a giant data base of values and comes up with a quick value. The value should have a range associated with it to account for home features that the program cannot qualify. For example, an all brick home and an all vinyl sided home would have a $15k or more difference that would not usually be picked up on by the address analysis. Still, these are a great first step if you are considering hiring a real estate agent to market your property. It gives you a chance to find out if your home meets an acceptable sales value for you personally. If it does, it’s a good idea to get with a real estate agent to get a more formal analysis.
*One caution on an address based system – beware of any singular value given on a search. For example, if the program or website comes back telling you your home is worth $200,000 (as opposed to a range) your number is most likely not close to that value. Community value differences, individual home features, structural details, landscaping elements and otherwise will make comparing two houses on proximity alone tricky. In this way a range is more reliable than single price!
Level 2 – Real Estate Agent CMA (comparative market analysis). If you want a much better value analysis; this is where a Real Estate agent can be very helpful. The agent will review a number of specifics related to your home including: size, features, layout elements, and more. With this information the agent can compare similar recently sold properties to come up with a value analysis of the house. Most agents will do this for free with the hope of getting to list your house.
*A caution or two about CMAs. This is not a certified appraisal (see below). An analysis is a presumed value, but it is not definitive. With this information you can get an idea of what you might want to list your home for, but it is not a reliable means of value with respect to items such as lender approvals. Also, beware of quick guess estimates. Multiplying a home’s size times a “going rate per square foot” in a community is not a reasonable CMA. Look for an agent that seeks out details that make your home more valuable than the neighboring homes and you can enjoy the rewards in the final price.
Level 3 – A certified appraisal. This certified appraisal should give you the highest accuracy for the price of your home at today’s values. According to the Appraisal Institute, the role of an appraiser is to provide objective, impartial, and unbiased opinions about the value of real property. With this mandate, the appraiser will spend a large amount of time compiling a detailed analysis of value.
*There is no caution note here – but it should be pointed out that paying for an appraisal just to get a price with which to list your home is not a common occurrence. An appraisal comes with a cost and has a time limit in which the appraisal is considered valid. Thus, a CMA from an agent is commonly reliable enough for a home listing. However, if you get a contract on your home which is contingent upon financing and/or contingent upon an appraisal, eventually the home would need to be appraised. Depending on the details in the agreement of the contract, this could be a buyer or seller expense.
In summary, depending on what phase of the selling process you are at, any of these methods should be useful tools.