Why should I estimate my home’s market value?
Establishing your home’s market value gives you greater control over your property taxes, insurance premiums, and the sale or refinancing of your home. Many people hire professional appraisers to estimate their home’s market value. However, there’s no reason why you can’t do it yourself by following a few simple steps outlined below.
What is market value?
Market value is how much a home would sell for under normal conditions. This excludes sales where the buyer or seller is under pressure to act, perhaps due to career relocation, death of a family member, or divorce. Market value is basically an educated guess, but it can be fairly accurate if you apply the right method and consider all the important details.
A number of factors may affect your home’s market value, including:
- External characteristics – “curb appeal,” home condition, lot size, popularity of an architectural style of property, water/sewage systems, sidewalk, paved road, etc.
- Internal characteristics – size and number of rooms, construction quality, appliance condition, demonstrated “pride of ownership,” heating type, energy efficiency, etc.
- Supply and demand – the number of homes for sale versus the number of buyers; how quickly the homes in your area sell.
- Location – desirability for a particular school district, neighborhood, etc.
How do I estimate my home’s market value?
We recommend you use the sales comparison approach to estimate your home’s market value. This is the primary method used by professional appraisers and real estate agents to determine the market value of homes.
Begin by researching recent sales of similar properties in the local area. The sale prices of these properties will provide a good place to start with in estimating your home’s value. Try to find sales of least three properties that are comparable to your home. If possible, make sure these properties were sold under normal conditions. You only want properties sold at market value.