The actual value of a home is the price the seller and the buyer have agreed upon. It is the value the buyer is willing to pay and the value the seller is willing to accept. In the end, your house is only worth whatever someone is willing to pay for it.
A lot of homeowners use online calculators to figure out their home value. That value could be 10 percent, 20 percent or more off target. According to many who have examined the accuracy of the estimates for property values that some online websites provides, e.g. “Zestimates” of value, generally speaking even with all today’s technology, predicted market value is not any better now than it was years ago.
To find out your home actual value, you will need a comparative market analysis. You can ask a professional local real estate agent for a comparative market analysis, i.e. CMA. Realtors offer this service for free, a CMA includes the realtor’s evaluation of the home and market to provide an estimate for listing purposes.
You can also hire an appraiser. The appraisal is an estimate of value as of the day the appraiser visits the home. This is the closest you will get to actual value.
Here are some of the things that influence your home value:
- Market: The region, city and neighborhood in which a home is located.
- Property: Characteristics of the house, including age, improvements and the land it sits on.
- Comparable properties: Sold, active and pending listings, cost, depreciation and other factors for similar houses in the same market.
Knowing your home’s value is important for several reasons:
- Buying power: Allows you to set up a realistic budget for your new home that you’re planning to buy. You’ll have a better idea on how much you will be able to afford.
- Selling fast: Helps you determine whether the listing price is appropriate or not and decide how to price your home and what would be the better pricing strategy for you.
- Financial benefits: Your home value determines refinances, home equity, insurance premiums and annual property taxes. Say for example, the tax assessment you received is too high, you can appeal using comps and may be rewarded with a lower tax bill.
In conclusion, even if you’re not selling your home it is always an advantage to know the real value of your home.