There are four ways to determine your home’s value. Some of these ways, however, are more reliable than the others.
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What are four methods to determine your home’s value?
The first and most basic way is to take a look at your tax assessment. If you got your assessment in the mail, you can look at that. In most counties, you can also visit the county assessor website and check there. In our area, the county assessed home values every two years, and they do so using basic information such as the size of the land and the size of the finished space.
There are a couple issues you might have with this method. First, the information they use might be old. The other issue is it’s a very basic method that’s applied with a formula using only certain criteria. This is a decent method to compare your home’s value against your neighbors’ homes, but it’s not the most accurate or up-to-date valuation method.
The second method is a free home evaluation website. One of the more popular free home evaluation websites is Zillow, which features their Zestimate tool. A Zestimate gathers information from the county records and combines that with recent sales of other homes in the area.
It’s beneficial that Zillow takes into account recent sales of other homes, but what’s not beneficial is they don’t have anyone actually walk through your home. This means they can’t tell the difference between a home that’s been completely remodeled and a home across the street that’s in the same condition it was years ago. If you’re curious about what’s happening with home values in your area, this is a good way to get started.
The third method is an appraisal. An appraisal happens when you either refinance a house, you buy a house using financing, or you sell a house and the buyer’s lender has ordered the appraisal. The downside to this method is an appraisal typically costs between $500 and $550, so if you’re just curious what your home is worth, it’s probably not a good investment because in two years that appraisal won’t be valid anyway.
For the most part, appraisals only happen in a transaction when there’s a loan involved. The appraiser’s job is to make sure the lender is able to safely lend the purchase amount that’s been requested.
Lastly, you can contact an agent and ask them to do a CMA, or comparative market analysis. There are a few benefits of a CMA. The first is most agents don’t charge for one. Second, they’re able to look at the market as a whole instead of recent home sales. We can then make some projections and give you an idea of not only what your home’s value is, but also what it may be going forward.
Unlike automated websites, agents can actually come out to your home and make adjustments for its different features. If your home is similar to your neighbor’s home that sold a month ago but yours has an extra 300 square feet, that needs to be accounted for.
If you have any questions or you’re thinking of selling your home in the future and you want to know what it’s worth, don’t hesitate to reach out to us. We’d love to help you.