6 Ways to Find Out What a House is Worth
Not All Home Value Calculators are Accurate
In today’s real estate market, everyone is anxious to find out exactly how much their current house (or the one they’re about to submit an offer on) is worth. In this article, we will show you 6 ways to find out how much a house is worth.
1. Federal Housing Finance Agency’s House Price Index Calculator
This is a free service, but it requires you to know the last purchase price of the property and when it occurred. If you know that, then visit the link below, select your state, the local market, when it last sold, its amount and you’re good to go. As far as its reliability, that’s a different story, because we don’t think it is very reliable, especially if the subject property sold many years ago. But hey, it’s free and it’s provided by your government who never gets it wrong, right?
2. Local Tax Assessor’s Website
This is where your property taxes are calculated and shared with the public. Many assessors throughout the U.S. will include more than just the taxed assessed value, they will also provide a market value estimate. Just keep in mind, when they do, it’s generated only once a year. So while local tax assessors are deemed to be a reliable source of information, if your real estate market is rapidly appreciating or depreciating, this once-a-year figure could be far off from current market activity.
3. Real Estate Websites
Real estate websites such as Zillow and Trulia and even nationwide real estate brokerages like Re/Max and Coldwell Banker feature a free estimated value that usually appears after you type in an address of a home. Each estimate is based on an automated valuation model (known as an AVM) and they are more reliable than a taxed assessed value. The main problem that we’ve discovered is that the property characteristics their estimates rely on are often wrong or not reported.
4. Ask a Local Real Estate Agent
A good way to determine the value of your home is to contact a local real estate agent who can perform a comparative market analysis (or CMA for short). Most of the time real estate agents are glad to offer a CMA for free, but some do charge because it can be a lot of work when done right. A CMA is a step up from an AVM because it doesn’t let a computer algorithm do all of the work. By working with a real estate agent, there’s a good chance that a human eye will correct any discrepancies.
5. Order a U.S. Home Value Report
For those real estate investors or homeowners that like to maintain their independence without consulting a real estate agent, our paid service provides U.S. Home Value Reports complete with sales comparables, images, and local market data. Reports start at only $39.95 and are human generated within a day. Each report is more than 12 pages long and offers much more detail than a standard real estate agent’s comparative market analysis, but without the potential for any bias because the valuation processor is not compensated by commission. In fact, their job is to get it right and we guarantee a margin of error of +/-5%. If it’s not, the report is free.
6. Hire a Licensed Appraiser
The most accurate way to determine the value of any property is to hire a licensed property appraiser. The cost for an appraisal varies by local area, but they average between $300 and $500. If you think that’s expensive, try ordering a commercial appraisal sometime.