Home Values: What You Need to Know

Looking to sell or refinance your home due to market rates?  Learn how to use online tools and offline services to value your home. 

Even if you are not interested in selling your home it is a good idea to know its worth. Why? Knowing your home’s value gives you a powerful financial tool that allows you to use the equity from your home, refinance for a better interest rate, negotiate lower property taxes, and more. For those considering selling their home it is crucial to know how your home compares to others in the same neighborhood.

A quick way to assess the worth of your home is to use the many online tools and companies who will give you a ballpark idea of what your home is worth. Many of the same companies also give you valuable free resources to boost the worth of your home. But not all of the resources for determining a house’s estimated worth are online. Often the offline sources for home evaluation allow for a face to face discussion with someone who is knowledgeable in the real estate market. Use the following information to learn what your home is worth and start put another financial tool in your pocket.

Find Your Home’s Worth Online

If you google the phrase “how much is my house worth” many valuation companies and their online estimators are on offer. According to a recent report, more than 20% of homeowners used an online estimator exclusively to get an estimate on their home’s worth. When searching online you can easily find multiple services that offer a free home value estimator. Here are some of the better automated valuation models (AVM) and the companies offering them:

  • Zillow: Zillow is a massive site and offers a no-obligation estimate on the market value of your home. Plug in your address and get results instantly.

  • Redfin: Redfin is a real estate site, but they offer free estimates based on your address. The drawback of this is if you decide to sell your home they may not have agents in your area.

  • Ownerly: Ownerly also utilizes your home’s address to give you an estimate. The difference between Ownerly and the above sites is that they are an online tool and are not real estate agents or brokers. The only downside to this site is that in order to receive your valuation you must register first.

  • Corelogic: this AVM is used by most mortgage lenders so the number you get from this online source is going to give you a good idea of what the home could be sold for in your area.

  • Federal Housing Finance Agency: The federal government is also another resource for finding out the value of your home. This tool does not give you the actual value of your home, but predicts what your home could sell for based on the year you select. It is helpful when determining when you should sell.

Find Your Home’s Value Offline

Online is not the only place to find out the value of your home. Get a home estimate, referred to as a comparative market analysis (CMA), from a local realtor. He or she provides you with an estimate of value that allows you to determine whether you want to sell the home. Keep in mind many realtors provide this service for free only if they know you are considering selling your home. Otherwise, expect a nominal fee for the service.

Another offline way to find your home’s value is to hire a property appraiser. When you buy a home an appraisal is often required by the bank in order to determine the actual value of a home. However, you do not have to be on the market in order to hire an appraiser. Appraisers evaluate your home based on an actual in-person inspection of the home, the improvements you have made over the years, the value of the land it is on, the prices of other homes near you, and the region in which you are located. Find an appraiser near you through the National Association of Realtors who list them by region, city, state or county. Expect to pay between $50-200 for an appraiser to create a valuation report for you.

The Power of a Home Estimate

Knowing the value of your home gives you a powerful financial tool, especially if you have lived in the home for more than five years. If you want to sell your home it allows you to set a realistic asking price. Additionally, if you do not wish to sell your home it gives you financial leverage against the equity in your home. Many homeowners who have owned their home for more than 20 years have a sizeable nest egg in their home. This can be tapped into in case of emergencies or to make important home upgrades.

If you do not wish to access your home’s equity then consider using the value of your home to lower your insurance premiums, or exert greater control over property taxes. You may find that after an assessment your property taxes are set too high and with an official valuation of your home in hand you can lower your tax bill.

Your home’s value can also assist you in getting lower monthly payments through refinancing. If you have substantial equity in your home and your credit is good consider refinancing with cash back. Not only could you get a lower interest rate than at the time you purchased your home, but since there is equity in your home, you could get lower payments and a nice portion of the equity back in cash.