How Much Is My House Worth? A Guide To Determining Home Value

When buying or selling your home, you’ll likely hear several different prices and values attributed to your property. Each value is determined by multiple factors and maybe even multiple real estate professionals, likely making you wonder: How much is my house actually worth?

Real estate professionals will analyze different features of your home to help determine its property value. Property value can be described as the amount a property is most likely to sell for in an open market under its usual conditions. Understanding what these different values mean can give buyers and sellers more leverage in navigating complex financial decisions.

What Are The Different Home Valuations?

When buying or selling a home, your home will be valued at a few different prices. Here’s what some of those values mean:

• Appraised value: The appraised value of a home is the property’s value at a specific point in time, assessed by a state-licensed real estate professional known as an appraiser.
• Assessed value: The assessed value of a house is the monetary worth assigned to your property by your city and represents how much your city can tax your home (usually about 50% of its appraised value). This number is determined by local government assessors who consider square footage, nearby property values and the current state of the market.
• Fair market value: The fair market value of a home is the amount a home or asset is sold for on the open market. Usually determined by an appraiser, this number is calculated by comparing a property’s value to the average value of three other comparable properties, also known as comps.

How To Find Out How Much Your House Is Worth

There are a few ways to find out how much your home is worth. Here are some of the most common ones:

1. Get A Professional Home Appraisal

Appraisals are a crucial part of the buying or selling process. Not only are appraisals required to secure a mortgage from a lender, but they also provide valuable, unbiased insight as to the value of an asset. The appraised value of a home is what helps determine the fair market value of a property and the amount that your mortgage lender can lend you.

To determine the appraised value, appraisers carefully evaluate your home’s condition, size, and interior and exterior details to get a general idea of the house’s value. Then the home is compared to recently sold homes in the immediate area to help determine the true market value of the property.

2. Use A Home Value Estimator

Many banks, brokerages and real estate websites offer their own online property-estimating resources. These home valuation tools help home buyers get a general idea of their home’s value without going through the professional channels. Some require as little as an address to assign an estimate to a property, while others ask for additional information to give a more accurate number.

While their results shouldn’t be taken as fact without consulting real estate professionals, home value estimators are convenient, fast and accessible, making them a valuable tool for the initial stages of your homeownership journey.

3. Ask A Real Estate Agent Or REALTOR^®

A real estate agent or REALTOR^® is a valuable resource during every stage of buying a home. They provide advice, professional expertise and support to ensure a seamless home buying process. Real estate agents assess local market trends and utilize resources like comps and comparative market analysis (CMA) to help determine the asking price of a home.

CMA is a valuation tool that helps agents more accurately price a home. Comps and CMA work hand in hand and use recently sold properties nearby to gauge where a home should be priced. Agents use CMA to get a better understanding of how the market values homes with similar housing market indicators. CMA also takes into consideration features that can impact the price of a home, like location, square footage and number of bedrooms and bathrooms. Often grouped with appraisals, these analyses are completed by real estate agents to determine a home’s fair market value.

4. Check Out Real Estate Comps

Real estate comps are comparable, recently sold properties in the immediate area of the property being sold. Comparable properties are carefully selected to ensure that they have similar housing market indicators, or features of a home that influence its price. Common indicators include condition, age, number of rooms, square footage, lot size and more.

Buyers, sellers and real estate professionals use comps to better understand the value of a property. They can also show a homeowner what features they should highlight during the selling process.

What Factors Affect Your Home Value?

• The home’s age and overall condition
• Total square footage of the house
• Number of bedrooms and bathrooms
• Additional living spaces, like a finished basement or screened-in porch
• Luxurious finishes, like granite countertops and walk-in closets
• Total square footage of the outdoor space
• Outdoor amenities, like a pool
• Neighborhood, location and access to amenities, like shops or public transportation
• Local housing market trends
• Comparable properties in the area
• Supply and demand dynamics
• Energy efficiency

Why Should You Know How Much Your House Is Worth?

Knowing how much your home is worth can give you leverage to make more informed financial decisions and more efficient financial planning. The value of a home is often a deciding factor when choosing to sell it and how much to sell it for. With this knowledge, you’ll have a better idea of how much equity has accrued in the property. If you’re looking to refinance the house, knowing its worth will provide insight into how much equity you can put towards future endeavors.

Knowing the value of your home also provides security to your mortgage lender by ensuring them that they’re lending you the right amount of money. If you’re considering a cash-out refinance, your home value helps give you a better idea of how much equity you can put towards future endeavors.

FAQs: Property Value

Here are some of the most common questions that arise when finding the value of your home.

How do I calculate the value of my house?

You can find the value of your home in many ways. Some might be easier or more accurate than others. The most accurate value you’ll get will likely be from a real estate agent or an appraiser. These professionals thoroughly analyze any factor that could impact the price of a home. Home valuation tools are also easily accessible online for your convenience but might give less accurate results.

How often does my home value change?

The value of houses is always changing and can be influenced by the condition of the market, supply and demand and interest rates. While property values are known to increase over time, there are cases where it can decrease. To ensure your home continues to increase in value, be sure to keep it in great condition by conducting maintenance and renovations.

Why should I use a home value estimator?

Home value estimators are tools for assigning a value to a property. They are mostly used for their convenience and accessibility, especially in early stages of home buying. These tools assign an estimated list price to a property, making them ideal for when you’re waiting on an appraisal or want to cross-reference the appraised value. While home value estimators are a convenient tool, the generated price should only be considered among other values you’ve acquired from real estate professionals.

How can I increase my home’s value?

Ensuring your home is up-to-date and in the best condition possible is the best way to keep your home’s value high. Condition is heavily considered when pricing a property; your home may be devalued if it comes with a list of needed repairs. Small, periodic renovations on different rooms in your home can keep its value high and its maintenance low.

The Bottom Line

Having awareness of your home’s value helps you make more informed decisions with a greater understanding of your financial capabilities. With this knowledge, you’ll understand how much your home could sell for, when’s the best time to sell it and how much you can afford in a new house.

The value of a property is dependent on numerous factors, some of which are out of a homeowner’s control. Homeowners can still maintain or increase their home’s value through small periodic renovations and upgrades.

Interested in refinancing your home? Start an application online with Rocket Mortgage^® today.