When you’re thinking of placing your home on the market for sale, you need to know the current value of the property. You know what you initially agreed to pay for your house, but that may not necessarily mean the home holds that same value today. Many factors contribute to appreciation or depreciation in real estate. Contributing factors include the neighborhood, new construction since your home was built, upgrades and additions you’ve invested in over the years, and competitive pricing regarding the successful sale of comparable homes in your neighborhood. There are essentially four methods available for determining the current worth of your home. The four methods of estimating the worth of your home in today’s market are your property taxes, comparable sales of similar homes in your neighborhood, professional appraisers, and free online home value calculators.
When you own a house, you pay property tax. Your property tax bill contains a tax assessed value of the property. The assessment rate, in most states, is between 80 and 90 percent. Property taxes are a percentage of the property’s tax assessed values, and the tax assessed values are a percentage of the fair market value or FMV. So, by carefully examining your property tax bill, you may be able to garner an idea of what your property is worth.
Another way to determine your home’s value, and perhaps more accurate concerning supply and demand, is to compare your home’s current condition to similar homes in your neighborhood. Because neighborhood contributes to home value, the location of your property is going to come into play in determining its current value. When searching for home value, it’s important that you consider homes that were successfully sold as opposed to homes that are currently on the market. Just because someone is asking for a particular price doesn’t mean they’ll get it, so when determining value, compare your home to homes that have recently sold.
If your home has four bedrooms and a swimming pool, you will look for other four bedroom homes with pools that recently sold. You may factor in upgrades, but it is possible to invest more in a remodel than you’ll be able to extract in a sale. Just because you’ve invested money into expensive upgrades does not mean your home’s value will increase by that amount, especially if the majority of homes in your area do not have those same upgraded features. However, if you’ve added new buildings to a property, the building structures may add value.
A third way to assess your home’s current value is to hire a professional home appraiser. An appraiser will walk through your entire property calculating several variables to determine your home’s current market value. There’s an advantage to having the home professionally appraised as most lenders will request an appraisal before granting home mortgage loans to potential buyers. So, having your home professionally evaluated before determining a sales price could work to your advantage in the sales process.
Finally, there are dozens upon dozens of online home value calculators. Although it is simple to enter your home address and have a computer generated response in moments, there is a certain margin of error in online home value calculators.
When preparing your home for sale, it’s important that you price the home efficiently. If you price your home too high, it could sit on the market for extended periods of time and experience price reductions along the way. What you paid for your home is not necessarily what it’s worth in today’s market, so it’s important that you properly assess your home’s value before placing a price tag on it. Consider your property tax bill to look for the assessed property values. Research the market for comparable houses recently sold in your neighborhood. Have the home and land evaluated by a professional home appraiser, use an online home value calculator, or consider combining all of those methods for the most accurate estimated value of your home.
The Lisa DiNoto Group can help in determining the value of the home and property you’re selling. Give us a call today at 909-921-2544.