3 Steps to Learn Your Home’s Value
When you know the facts, you make better decisions. It’s plain and simple. Here are three easy steps that will help you understand your home’s market value:
Step 1: Know What “Home Market Value” Really Means
Believe it or not, your home’s market value is not based on the following:
- Your monthly mortgage payment
- Your opinion of how great your home is
- Your memories of your home
In a nutshell, market value is what buyers are willing to pay for your home.
As a homeowner, it’s tough to see your home the way a buyer would. Although you think little Danny’s handprints in the front porch pavement are cute, a potential buyer will see them as just one more thing to fix. Keep in mind that a serious buyer will take critical mental note of the following:
Location, location, location: How close is your home to highways, schools and shopping centers?
Safety: Does your neighborhood have sidewalks, underground electrical lines and a low crime rate?
Curb appeal: Is your house pretty to look at? Or is it an outdated eyesore?
Square footage: How big is your home? Does it have any weird layout issues?
Number of rooms: Does the ratio of bathrooms to bedrooms make sense?
Updated appliances: Will the buyer need to plan for the cost of a new fridge, dishwasher or other items?
School district: How are the schools rated in your area? Are there multiple options?
Some factors affecting your home’s market value are out of your control. For instance, if the economy is tanking, no one’s going to pay top dollar for a house. The final price tag may also depend on:
Mortgage interest rates: A mortgage is a huge financial commitment, so a high interest rate will keep some buyers from pulling the trigger.
Time of year: Homes just sell better during certain months than they do in others. For example, most buyers won’t choose to move during the middle of the holiday season or at the beginning of the school year. Expect to get more or fewer offers depending on the time of year.
Supply and demand: If there are a ton of houses on the market, that means you’ve got competition. On the other hand, if there are more interested buyers than there are “For Sale” signs, raise the price like the savvy seller you are!
How similar homes in the area have sold: How much are people willing to pay for a home like yours in your neighborhood? Are there many foreclosures in your area? This will give you a lot of insight into how desirable your home may be—or how much someone might be willing to pay.
If you’re trying to sell your home, an expert real estate agent can help you analyze all this information to create your ideal listing price. Want to investigate on your own? A quick online search can give you a ballpark number.
Step 2: Use Free Online Tools to Estimate the Value of Your HomeIf you search for your address on an online real estate marketplace, you’ll likely find all kinds of facts about your home that are public record, including:
- Type of home
- Year the home was built
- Number of rooms, bedrooms and bathrooms
- Square footage of the home
- Square footage of the lot
- Heating and cooling systems
- Number of parking spots
- How much you and each previous owner paid for the home
- Is my home value trending upward or downward?
- How does my home value compare to other homes in my neighborhood or zip code?
- How does my home value compare to those in other zip codes in my area?
- What’s the market temperature? Is it a hot or cold time to sell?