How can I found how much my home is worth?
Diane, Los Angeles, CA
Whether you are planning to sell your home, refinance or take out a home equity loan or line of credit, you need to know the current market value of your home. This can differ dramatically from what you might think your home is worth. People often believe their home is worth more than it actually is. That’s because, ultimately, your home is only worth what somebody else is willing to pay for it.
So how can you get an idea of your home’s current market value? The easiest and quickest way to start is to check online. Sites like zillow.com, realtor.com and redfin.com offer basic estimates of home values as well as the ability to research your local market to find comparable homes that have recently sold and are currently for sale. Make sure you search for homes with the same size and features as yours.
Another option is to consult a local, experienced real estate agent who can give you an objective perspective on your home and do market research for you. You don’t have to pay them unless you hire them to list your house and they are able to sell it. To get the most accurate estimate of your home's value, you should hire a certified, licensed home appraiser. These appraisers go by a checklist and use a standardized evaluation method, but two appraisers can still come up with two different estimates.
Unfortunately, home appraisal is a murky business. However, there are certain factors that any source would consider when evaluating a home, including:
- Community: Does the community offer efficient public services and a thriving business district? Be aware of any community development plans that can positively or negatively affect your area.
- Neighborhood: Is it safe and family friendly? Is it walkable and close to shops and cafes? How good are the local schools? Is there easy access to public transportation?
- Foreclosures: Has your neighborhood been prone to foreclosure? More than one can be a red flag.
- Land: What is the lot size and how usable and desirable is the land? Is it a corner lot, on a cul-de-sac or steep hill or next to an industrial or commercial property?
- Square feet: How much livable space is there (unfinished basements and garages usually don’t count), and how desirable is the layout? How many rooms are there, and what are their functions and features?
- Condition: How old is your home, and is it in good shape? Has it been updated?
- Appliances and HVAC units: How old are the appliances, heating, cooling, ventilation and plumbing systems, and what are their conditions?
- Energy efficiency: Have you made any energy saving improvements to your home (such as replacing old appliances with energy star-rated ones or installing new lights or solar panels)?
Obviously, if your home is old, dated, small and in an undesirable spot, its value will be seriously compromised. But there are other, less obvious factors that can also affect your home's value. For example, the style of your home, demographic changes in your neighborhood and general perception of your area can also help or hurt you.
When appraising how much your home is worth, it is important that you do your research and consult multiple sources, as estimates can vary widely. If you work with a real estate agent or certified appraiser, you can help improve your chances of a higher appraisal by having receipts for any home improvements you’ve made and records of all maintenance and repairs on hand.