How much is your home worth? Wondering about your home’s value can just be a curiosity to see if it's recovered from the housing crash of 2008, or how your home is keeping up with house prices in the area, or can be an immediate need to help you set a price to sell it.
Before shopping for a new home and mortgage lenders so you can get the best mortgage rates, looking at housing prices in your neighborhood can be the first step to figuring out your property value.
There are many ways to determine property value, some more accurate than others. Here are some ways to figure out how much your home is worth:
Online estimators
If you’ve entered your address on a website and gotten your home’s value assessed in seconds, then you have seen home value estimators in action.
A home value estimator at a real estate or lending website provides an estimated market value through an algorithm it has come up with. These can include public data such as recent home sales and tax records, home features and size, location and market conditions, though not all of the inputs may be made known to users. Some sites require registering as a user before using the free service.
User-submitted data may also be used — though that could be fudged if it is not verified that the person submitting the data is the owner. For example, someone could go around and add a few bedrooms to the profile of each home on the block on a home valuation site, boosting the valuation of the entire neighborhood.
One popular online home value estimator says it has a median error rate of 4.3 percent. Of the top metro area it covers, its accuracy ranged from a 3.1 percent median error rate in Phoenix to as high as 8.2 percent in Dallas-Fort Worth, Texas. Its median error rate has improved, from 13.6 percent in 2006 to 8 percent in 2015 and 4.3 percent in February 2018.
Robo home valuations can fall short in other ways. They can’t determine the actual condition of a house, such as if it has been recently renovated or desperately needs a bathroom remodel. Home characteristics that are in demand, such as an open layout or architectural style, can’t be factored in.
The robo-estimators don’t compare like properties, and may compare a two-story to a ranch home as if they’re the same value, says Nathan Garrett, owner of Garretts Realty Group in Crestwood, KY. Short sales and foreclosures aren’t filtered out, which can hurt a home’s estimated price, Garrett says.
Look it up yourself
Instead of relying on a home value estimator, Garrett suggests finding a local or national website that shows sold data and search for homes within a half mile of your home that have sold in the last three to six months. Look for properties that are similar in age, size and style, he says.
Your local tax assessor’s office will also have sales prices available, since they’re a public record. How easy that information is to wade through is up to your tax office, though it may be available online.
When looking through tax records, be aware that the assessed value is often less than the appraised value or market value of a home. Assessed value determines property tax rates.
You can also check your local MLS, or multiple listing service, for comparisons of recent home sales. A real estate agent can provide this for you, though you may have to hire an agent to get them to give it to you.
If you’re willing to do more legwork, you can call or visit home sellers in your neighborhood to see what they’re asking for.
When comparing homes, be sure to get the square footage of each home. Once you have the prices for three or so homes that are comparable to yours, divide the sales price by the square footage to get the average price per square foot. Multiply that price by the square footage of your house and you’ll get an estimate of how much your home is worth.
Get a home appraisal
A home appraisal is the most accurate way to find out how much a home is worth, says Richard Pisnoy, principal at Silver Fin Capital Group in Great Neck, N.Y. Even then, values between different home appraisers can differ from 5-10 percent, Pisnoy says.
Appraisers will include comps — sales of similar homes in the area — and will thoroughly look at your home to determine its value. Upgrades such as a new kitchen or bathroom will be factored, as well as the condition of your home.
Home appraisals can cost $400 to $1,000, depending on the size of the property, Pisnoy says, which may be enough to dissuade you from getting one unless you’re buying or selling a home.
Seek a view from above
Comparing your home to others in your neighborhood is probably the best way to get an accurate home value. But if you want to get a bigger picture of how your home compares to others in the country and in your general geographic area, the National Association of Realtors lists sales prices of existing single-family homes.
In 2017 the average price of a home sold in the U.S.was $275,600, NAR reports. It lists four main geographic areas, where the average 2017 prices were:
- West: $391,500
- Northeast: $311,900
- South: $259,700
- Midwest: $226,900
Hire a real estate agent
We talked to plenty of real estate agents who said the best way to determine how much your home is worth is to hire a real estate agent. They’re biased, of course, but it makes sense if you don’t want to do all of the legwork yourself. Some will offer pricing data for free.
More than the market value or what recent homes have sold for, a home’s value is determined by many factors that a real estate agent can help a homeowner analyze and highlight to buyers. Your property may have a stunning view, remodeled kitchen, an extra bedroom and other amenities that buyers are looking for.
Real estate agents “are frequently viewing the market offerings, listening to what buyers want, and making these quantitative value judgements,” says Elisa Meyer, a former real estate agent who writes real estate education courses at At Your Pace Online.