At some point, most homeowners ask themselves how much their home is worth. If you're thinking about selling your home, this question is even more prevalent. It's essential to make sure that buyers are interested in your home and are willing to make an offer. Whether you're selling or not, understanding whether your real estate investment has risen in value is simply wise financial sense. So, how do you know how much your home is worth?
There are several ways to find out your home valuation without contacting a real estate agent or appraiser. One way is with a home value estimator. This gives you a free estimate of what your home is worth based on data such as square footage in recent home sales in the area. Places like Zillow, Realtor, and other real estate websites can provide an estimate, but it's exactly that, an estimate. Sometimes the Zillow estimate can be extremely overinflated or even underpriced so it's not the end-all to find out how much your home is worth.
Real estate experts determine home value with comparative market analysis or a CMA. This involves looking at similar properties that have sold within the last three months. Homeowners will need to find a similar property in square footage, how many bedrooms and bathrooms the property has, lot size, and general condition. You can simply do a search for homes that are currently on the market to get a sense of what homes are currently being listed at, but the real test is what homes have been sold for. This is the true market determination because someone will only pay what they feel a house is worth. And of course, what could be worth more to one person might be less to another, so there is the rub.
If you want to keep real estate agents out of it for now, simply do a search on a real estate website about homes that have sold in the area. You can take a look at what has sold, how much it has sold for, and how long ago it sold. Unfortunately, you might not be able to see how much the home was originally listed for. This may give sellers an advantage or disadvantage. Some real estate websites will tell you the percentage of asking price to selling price, meaning that if the list to sale average is that 96%, that means that homes sold for $100,000 generally sold for $96,000, or relatively speaking depending on the original price. If homes have sold for around 100% of their value, that means just about every home that listed for its full asking price is what it sold for.
This is pretty unusual, however, unless we are in a crazy seller's market, which we were just a few years ago. Today, however, homes are selling anywhere from 97% to 99% of their value and in some cases, even over the asking price. However, this could also mean that the home was originally priced lower than current valuations. This is a real estate tactics that many agents use to drum up more business and interest on the house since it's technically underpriced.
Once you have a good idea of a good price range, you can speak to an agent about a starting point. It's not a good idea to price the home higher than current valuations as you might not get any buyers through the door. Pricing it correctly from the beginning is really the key to getting a home sold fast.