What’s It Really Worth? 5 Ways to Determine the True Value of Your Home

Selling your property can be an overwhelming task especially when you are not certain what the value of your home is. Your worst nightmare can be selling the property at a way below value and regretting such choices. But what is the actual price of a property? If you are uncertain of what the value of your property is, here is how you can educate yourself about the value of your home.

1. Location Determines a Property’s Value

Different spots within a particular area valued differently. Areas that are secluded and away from heavy traffic are usually highly demanded due to safety aspects especially when it comes to children. The appreciation of property values highlights the significance of selecting between different locations of neighborhoods. A lot of middle- and upper-class neighborhoods limit additional constructions; with such limitations being placed when the developers buy and subdivide the land. As a result of that, a lot of neighborhood develop their own cultural, social, and demographic characteristics which affect the demand for homes.

2. Online Evaluation Tools

Searching for the value of a property online will create so many results and numerous value estimators. If anything, according to a survey, twenty-two percent of property owners who sought the value of their homes used the online estimator. The automated valuation models in these sites are usually offered by reals estate sites and lenders for use by those looking to determine the value of their homes. Using public records such as title deeds, property transfers, and tax assessments along with some mathematical computations, the AVM will predict the value of a property based on the listing price and recent sales in that location. However, even with the use of an automated valuation model, it is imperative to speak to a local real estate professional to obtain more information on online evaluation tools and other home evaluation techniques.

3. Impact of Future Developments

As a homeowner, you need to be cognizant of the current states of the local amenities as well as the future prospects for municipal and commercial development in an area. Plans involving hospitals, schools, traffic, and other kinds of infrastructure will have a greater influence on the value of a property as the present and future construction of commercial amenities within a certain locale.

Property investors should factor into their purchases the potential impact of developable or vacant land on the future supply and property prices. This is an ongoing risk experienced by people who wish to buy condominiums. Prices for condominiums are affected by demand factors similar to those faced by single-family homes as well as land appreciation on which the structure stands.

An outstanding issue for owners of condominiums is the aspect of supply. Unlike the single-family homes built on infill locations, most condos can be built on small land parcels and within short periods, increasing their supply and pushing down their prices significantly. Owners of condominiums can find it daunting to gauge the potential for land values and new development since high rises and multi-unit structures can be constructed on parcels of land which were initially homes to different commercial or residential real estate.

4. Work with a Professional

If you are planning to put your house on sale, it is advisable to contact an agent, irrespective of what you find online. There are high chances the professional may have detailed information that would assist you to make informed decision as far as valuing your property is concerned. Real estate agents do not pull stale information from anywhere. Unlike some of the evaluation tools found online, a real estate agent has access to various listing service database of property for sale in places which allow them to conduct effective and accurate comparative market analysis.

Apart from that, real estate agents will take their time to assess your property before they can determine its value. They will take into consideration different aspects such as landscaping, the property’s condition, upgrades made on the property, and many other factors which are not listed in public records but could still create a huge difference to potential buyers. In other words, agents utilize their real-world experience to compare every detail of your property to the current listings and recent sales. For instance, if you painted your walls a few months ago but your bathroom is an old-fashioned one, a professional will know how to weigh these aspects and come up with competitive pricing for your property. Do not forget that the market value of a home is not determined using formulas but rather on the amount a person is willing to pay for it. No computer or software is able to determine this. Price your property at a higher rate and potential buyers will pass by without paying attention to your property. Price it at a low price and you could end up losing a lot of money. The right price for your property will earn you the most money within the shortest time possible.

5. Price Index Calculator

If you are not confident about the AVM technique of property valuation, the house price index calculator by the Federal Housing Financing Agency can be an alternative solution because it utilizes a more scientific approach to home valuation. The HPI tool utilizes a “repeat sales technique” to value a particular property. Containing millions of mortgage transactions since the seventies, the FHFA tracks the changes in a home’s value from one point to another, then uses the information to offer an estimate of how property fluctuates with a certain market.

Bottom Line

Knowing the value of your home makes it possible for you to evaluate what is affordable to you and ascertain if a listing is priced the right way. That way, you will know how to place your property on the market. Moreover, the benefits of finding the value of your home do not end with the sale or purchase. Insurance premiums, refinance, annual property taxes, and home equity lines of credit are all based on the value of a home. Determining the value of your home means greater control over the aforementioned processes.