How Much Is Your House Worth?

How Much Is Your House Worth?

How Much Is Your House Worth?

It’s useful to know how much your home is worth if you’re considering selling it, or if you’re thinking of tapping home equity for renovations or other projects. It can also give you a feel for your overall net worth, though your home’s value will fluctuate over time.

While you don’t need to revisit your home’s value too often, checking on it periodically, such as once a year, is a smart move for several reasons. Knowing the current value of your home allows you to determine, for example, whether your homeowners’ insurance policy still adequately covers the property.

In an official sense, a home appraisal can help you petition your bank to get private mortgage insurance removed from your mortgage payment if you feel your equity now exceeds 20% of the home’s value. It can also give you something to work with if you’re fighting your city’s tax evaluation of your home. “You don’t want to be overtaxed.

Many elements can affect your home’s value. The physical condition of your home is important, the number of bedrooms and bathrooms in the house, its square footage, how old it is, and the style of home (colonial, split, ranch, etc.).

Various parts of your home—the roof, the carpets and the appliances—depreciate the older they are, so to maintain value in your home, it’s important to continue to make updates and improvements. Other things that may increase the price of a home is the presence of a basement and whether it is finished, as well as recent home improvements both inside and outside the home. Curb appeal is definitely an important factor.

There are also elements outside of a homeowners’ control that determine the price of their home. If you bought a home on the outskirts of town and now, there’s a gourmet grocery store and a variety of upscale retailers nearby, your value has likely gone up. “If you bought in a distressed neighbourhood and over time, investors or urban homesteaders have come in and fixed up the surrounding homes, the value of your home will go up. Value is also determined by both the seller and potential buyer. seeking out local real estate agents who could provide a comparative analysis based on pending, active, and sold homes in your neighbourhood.

The housing market will cause prices to increase or decrease. “Your home should appreciate in value at the rate that the general economy is appreciating at.

When getting a home value estimate, consider the three main types of valuation:

  • Fair market value: Fair market value encompasses what your home looks like to prospective buyers compared to other homes in the area. Consider the sale price of a home that’s similar to yours (the same number of bedrooms and bathrooms, square footage or outdoor space, say). If you work with a real estate agent to help you sell your home, this is where your agent will start: by looking at comps to gauge what buyers have been willing to pay for a property comparable to yours.
  • Appraised value: While the appraised value of your home factors in comps, it differs from fair market value. To calculate the appraised value, a licensed appraiser considers the location, size and condition of your home, and any renovations you’ve completed. The appraised value is what mortgage lenders look at when a borrower buys a home or refinances their mortgage.
  • Assessed value: The assessed value is then assigned the dollar value of your home used by local county tax assessors to determine property taxes. “Tax assessors calculate an assessed value based on various factors, which may include the appraised value and the fair market value, as well as any home improvements, whether you generate income from the property, and any tax exemptions. Usually, the assessed value is lower than fair market value and doesn’t actually represent how much a property could sell for.

Check your county or municipal auditor’s website, county auditors periodically assess the value of residential properties for property tax purposes, and this information is searchable online. You can look up the assessed value of your house to see if it has appreciated, or compare the figures with other homes for sale.

Mortgage lenders hire appraisers to confirm the value of a house before approving a loan. Some home sellers choose to take the extra step of hiring an appraiser, but it’s not required. The appraiser considers the characteristics of the property, such as how many bedrooms and bathrooms it has, as well as comps, similar to a CMA prepared by a real estate agent.

Ask a real estate agent for a free comparative market analysis
Real estate agents typically offer a comparative market analysis (CMA) for free in hopes of winning your business if you’re selling your house. To complete the CMA, the agent pulls data about recent sales of comps in the area. They then draw on their knowledge of the neighbourhood and any special characteristics of your property to estimate its value. A buyer’s agent may also provide this same service for any home you want to make an offer on.

Whether you’re interested in selling your home, seeking a refinance, or are just curious, knowing what your home is worth can open multiple options for you. If the current price is not in your favour and you want to sell, try to wait.


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