Determining the Value of Your Home
There are several criteria to consider when it comes to determining the value of your home. The size, age, condition of the home, and surrounding property play a big part in estimating value.
You may take pride in the investments you’ve made in upgrades and renovations, but the value of a home is most directly impacted by the neighborhood in which it’s located. This is something to keep in mind when you consider value-add projects.
Still, if you’re curious, there are a number of different ways to estimate the current value of your home:
- Zillow – Zillow will give you what the company refers to as a “Zestimate.” A Zestimate is defined as an “estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions.” Zillow welcomes additional information from real estate agents, appraisals such as a comparative market analysis (CMA) from a real estate agent, or appraisals from professional appraisers. If a Zestimate appears unusually low, a homeowner can also provide additional information directly to Zillow who will then adjust their estimate accordingly. You can also use Zillow to do your own comps based on their estimates of homes in your neighborhood.
- Trulia – Another quick way to get a ballpark estimate is by visiting Trulia. Trulia, which was purchased by Zillow in 2014, offers a suggested value which is generally in the same range as Zillow. What makes Trulia different is its neighborhood focus. It also provides comparable homes nearby when you enter your address. There’s a great deal of controversy on just how accurate Zillow and Trulia really are. Unlike Realtor.com, which gets pricing information directly from Multiple Listing Service (MLS), both Zillow and Trulia depend on real estate agents to enter their listings.
- Redfin – Redfin is a technology-powered real estate broker whose mission is,”to redefine real estate in the customer’s favor.” The company has multiple MLS feeds and a nationwide team of real estate agents. You can search and get an estimated value for your home and other homes near by.
- Real estate agent – If you’re thinking about selling, an agent will find comparable homes (often referred to as comps) that have sold in the neighborhood over the past 6 months. A real estate agent’s estimate also factors in aesthetics and unique amenities like a swimming pool, central air conditioning, custom kitchen and bath, etc. However, square footage, location, and comp prices will ultimately determine an asking price.
- Realtor.com – Even though you can’t get a price for a home not for sale on this site, you can do research on the value of other homes in your neighborhood that are currently on the market.
- Home appraisal – While it may seem counter intuitive, a home appraisal is a “bare bones” assessment of your home based on comps as well. Should a comparable home be unavailable, the real estate agent would determine the replacement cost. An appraiser is not concerned with aesthetic elements. When an appraisal is conducted as part of a home sale, the appraiser is there to confirm that the home is equal or greater in value to the amount of money the lender is loaning the buyer.
The Bottom Line
Determining the the exact value of a home is nearly impossible. The sites listed above do provide a ballpark and comps that can be used to determine a price range. If you’ve decided to sell, a real estate agent will be more than happy to provide an estimate and a price range that can be used to negotiate the final sale. Ultimately, the value of your home comes down to what the market will bear.