A home is only worth as much as someone will pay for it. Literally -- the definition of "market value" is the price an informed buyer will pay for a home that's been on the market for a reasonable length of time. Determining how much that is can be tricky. Although you need a professional valuation to get the most accurate figure, an informal estimate you find on your own can serve as a good starting point.
The only way to get a true fair market valuation is through a licensed appraiser. The appraiser researches comparable sales -- recently closed sales of similar homes in your neighborhood -- and compares them to your home. During this comparison, the appraiser adds to or subtracts from the value of your home, depending on whether it compares favorably or unfavorably to the comparison homes. The appraiser also considers neighborhood characteristics, such as schools, transportation and accessibility of shopping, as well as socioeconomic trends. The result is considered an estimate of value rather than an exact, set-in-stone figure, but it's the most accurate valuation available.
Comparable Market Analysis
A comparable market analysis estimates optimum selling price, not market value. However, in many cases, such as when you're trying to determine a sale price for a home you want to sell, or an offer price for a home you want to buy, the likely sale price is all you need. Your real estate agent will prepare your analysis by searching recently closed sales of similar homes in your neighborhood. The primary differences between an analysis and appraisal are that the analysis is done by an agent, not a licensed appraiser, and the agent doesn't make an appraisal's detailed adjustments to the subject property's value.
Automated Valuation Modeling
A number of websites offer free home value calculators that perform automated valuation modeling. An automated valuation can't replace an appraisal. And it’s only as good as the data it uses, so estimates vary wildly from one site to another. For example, the same home was valued at approximately $148,000 by Zillow and approximately $171,000 by Chase. Note that Zillow uses tax assessments, previous sales and recent comparable sales as well as the home's physical characteristics to estimate value. Chase uses these factors as well as such public information as mortgage records and deeds. Many value calculators allow you to add information about the home to increase the accuracy of the valuation.
You might be able to find a property's market value by researching its property tax valuation, which is called an assessment. The records are available to the public. Because different counties have different methods of assessing value and of expressing their assessments, it's important to talk to someone at the tax office to learn how to interpret the figures. For example, some counties' assessments are expressed as full market value, whereas other counties use a percentage of market value.
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