How Much is my Home Worth?
The first question everyone asks before deciding to sell is “how much is my home worth?” The home’s value will determine your current equity, which may determine whether you can afford to sell and purchase another home.
Here is some basic information on how a real estate professional determines how much your home is worth:
What Are Comps
To determine home worth or value, an appraiser or an agent will typically look at three comparable sales, or “comps” as they are known in the industry. Agents and Appraisers have access to the Multiple Listing Service, known as the MLS, which is a database of all the properties in a given area that have been listed “for sale,” are in process of being sold (pending,) or have already sold. Without being an agent or an appraiser, you may have a harder time accessing this information. However, using the tools below in the “resources” section, you can get a good idea of similar comps. Additionally, you can ask your agent for a list of comps – which should be easy and free for your agent to supply to you.
FIND OUT THE VALUE OF YOUR HOME WITH OUR FREE HOME VALUATION REPORT. CLICK HERE
The properties that have been sold already are the key
To determine your house value, you need to find homes that are similar in size, condition, and location. The theory behind value is that your home is worth whatever others would be willing to pay for it – and the best way to determine how much people are willing to pay is by discovering how much they’ve paid for similar homes.
How to Use Comps to Determine House Value
However, obviously every home is different, with features that make the home more or less desirable. For example, a three bedroom house is probably worth more than a similar home in the neighborhood with only two bedrooms, just as a two car garage is worth more than a one car garage. So, to determine a house’s value, you will look at three similar properties that have sold within the previous six months that are similar, and then compensate for the differences. Does one home have a pool and your home does not? Find out what a pool is worth and subtract that from your home. Does one of the comps have 100 square feet less? Then find the cost per square foot average in your area and increase your home’s value by that much.
Keep in mind -this is a very simplistic description for how appraisers actually come up with the Fair Market Value of your property, so your value may not be exactly what an appraiser will determine your value is. However, by following the same guidelines, you can estimate that cost and get fairly close.
Article produced by biggerpockets.com
Real estate professionals are trained to determine your homes value by the use of comparables as explained above. While you may be able to get a rough idea from doing some basic research online, only a real estate agent has access to the MLS and can identify accurate comps in real time.
CHECK OUT ALL THESE GREAT HOMES IN THE VALLEY – PRICED UNDER $250K!!!
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