4 Essential Steps to Determine a Home’s Value
09/09/2020
Selling your house is, without a doubt, a very serious decision. While some people take the approach “I want to sell my house fast,” it is always a good idea to try and devote some time to evaluating your house’s value – especially since you might find out that your home is actually worth way more than you thought.
There are several things that affect your house’s value, and the more you know about them, the easier it will be for you to determine it on your own. Some of them include location, size, age, renovations, repairs, and so on.
We understand that for people who have no experience in it, it can be hard to take all those factors into consideration. That’s why we created this short guide that will tell you everything you need to know about assessing how much your home is worth. So, if you want to find out what are the four essential steps, all you have to do is keep reading.
Step 1: Try the valuation tools available online
Nowadays, you can find almost anything on the internet – we all know that – so it shouldn’t come as a surprise that there are tools available online to establish how much your house is worth. Based on the information you provide, as well as information gleaned from the public records, they give you an approximate value of your property.
Keep in mind that, just like with everything, there are both pros and cons to it. First of all, the majority of them are free and easy to use. It’s a quick way of finding out how much your property is worth more or less, without having to provide too much information. Finally, such tools are updated regularly, which means that the price they give you is adequate to the current market conditions.
Now, the cons. Depending on the site you are using, the value you’ll get might differ. Also, these tools don’t take into consideration the unique features of your home, that might cause people to offer more money for it.
Step 2: Hire a realtor
Working with a realtor is a great way of getting a second opinion to go along with the sum that you received from an online valuation tool. Many realtors use the so-called comparative market analysis in order to estimate your house’s value – which includes information about comparable homes in your area.
A good analysis can tell you a lot not only about the value of your house but also about the selling process. Some of the information you can gain include the price of the houses similar to yours that were sold recently, how long it took their owners to sell them, and how the price they were sold for compared to the initial offer.
Keep in mind that, while it is a good option, processes realtors use might still not give you a precise value of your home, as they might overlook some of your home’s features that affect it.
Step 3: Use services of a professional appraiser
Even though as a seller, it is not necessary for you to get an appraisal, it would still be a good idea – this way, you will have no doubts about how much your property is actually worth, as it is the appraiser’s responsibility to provide a thoroughly researched estimate of a house’s value, by analyzing the recently sold or pending homes similar to yours, and visiting your property.
The average cost of hiring an appraiser is around $332. However, before you decide on one, you need to make sure that they meet the requirements of the Appraisal Qualifications Board. Having an experience, preferably in the local market, is always a bonus. While this is the average cost, a lot depends on where you live, and the size of your home. Appraising a mansion in Beverly Hills will be more expensive than appraising a studio apartment on the outskirts of Los Angeles.
An additional advantage of hiring a professional appraiser is that they can suggest some ideas on renovations and improvements you might not have thought about before so that you can increase the value of your home.
Step 4: Analyse similar houses by yourself
You can also compare houses similar to yours in the area by yourself. To do that, you need to take into account factors such as age and size, sale history, overall condition of the house, the location, listing price vs. sale price, and so on. Another thing is that you cannot forget about the differences between your home and other houses, which might affect the amount of money that you’ll receive for the house. For instance – maybe one of the houses that were sold had a pool, and yours doesn’t. This is something that affects the sale prices.
There are many online tools that allow you to compare the comps – just keep in mind that you have to provide them with at least three different houses to get an accurate result. Once you have done it, take a look at the trend in your local market – are the proper prices going up or down? Have property taxes increased in recent years? Answering those questions will help you price your house adequately to the market situation.
The Bottom Line
Selling a house is never an easy process – there are just so many documents to fill out, you need to rent a moving van, clean the house, and, most importantly, estimate how much money you can actually sell your house for. Unfortunately, this is something that changes rapidly, as a lot depends on the market’s trends, property taxes, and so on.
While this is definitely not a piece of cake, following the steps we have listed above can help you with getting the most accurate estimated price for your property. Good luck!
