"How much is my home worth?" You may wonder about the answer to this question if you plan on selling your home or if you have plans to refinance and need to know how much equity you have available.
Assumed Value versus Real Value
The value of a home is not determined by how much money the owner thinks the home is worth. While some owners have a fairly accurate idea of how much their home is worth, there are plenty of homeowners who have a wildly inaccurate idea of how much money they could successfully sell their homes for. The amount of money a home is worth is not necessarily how much a seller wants to sell the home for. Instead, a home's actual worth is established by comparing the home to similar homes within the same area as well as looking at any special features the home offers.
The actual worth of a home can come as a surprise to homeowners who assume their home is worth more. For this reason, it is important to find out the answer to the question "How much is my home worth?" before making the assumption that the home is worth a certain amount. In particular, find out the accurate value of your home in the following instances:
- Before attempting to refinance your home, especially for a cash-out refinance
- Before trying to obtain or refinance a home equity loan or home equity line of credit
- Before settling on a selling price when putting your home on the market
- Before applying for a large loan where your total assets will be taken into consideration
Don't assume that you already know how much your home is worth. Luckily there is more than one source for finding out the estimated value of your home.
How Much Is My Home Worth Really?
It is a sobering fact that your home may not even be worth the amount of money you paid for it years ago, but on the other hand many people do indeed find that their homes appreciate in value over a long period of time. Find out how much your home is worth using one of these methods:
- Get a market value estimate from a real estate agent. Local agents know how much money homes are likely to sell for based on the comparable properties in the area. Most real estate agents are happy to provide market value estimates to potential customers free of charge.
- Review the assessment value on your property taxes. County assessors estimate how much money homes are worth in order to figure out how much money to charge for real estate taxes. While tax assessment value estimates are typically lower than the actual value of the home, these numbers can be good starting points.
- Use an online resource. Websites like Zillow.com and Yahoo Real Estate provide fairly accurate estimates of home values. The great thing about these particular websites is that they do not require registration in order to find out a home value, and they do not send e-mail solicitations after utilizing the website.
Keep in mind that the amount of money your home is actually worth may not be the amount of money you can obtain from a buyer. Many buyers view the value of a home as the starting point from which negotiations for the purchase price will begin.
The very best way to get an accurate assessment of what your home is worth is to pay for a professional home appraisal. An appraiser will take everything into consideration when estimating your home's worth, including factors that websites and local real estate agents may not consider such as improvements you made to the home.
An appraisal is a good idea for sellers who not only want to get an accurate idea of how much money their home is worth, but who also want to have tangible proof that the home has been appraised at a certain value.