Calculating the value of your house must take many factors into consideration. While there is a formula to calculate the future value of your house, the current value is typically determined using the market comparison method, which is not as much a formula as it is a comparison of fair market value, prices, and features. Market comparison uses a variety of information sources. In general, it is wise to use several sources when determining the valuation of your home, to get the most thorough view.
Online calculators can be used to estimate the value of your house. Most use a combination of public data and proprietary data to determine property value. Generally, you only need to submit your address, and occasionally your email, in order to receive an immediate valuation report. Additionally, this type of research can help you figure the average price per square foot of houses in your area. This is a general valuation used by both realtors and appraisers. Your tax assessor’s office also has current house assessments with useful valuations and property information on houses in your area.
Consult a Realtor
Relying on the expertise of a realtor is an excellent way to determine the current value of your house. Everyday realtors see how much houses in every section of town, of every size and acreage and upgrade, are selling for. They see typical list prices for houses similar to yours and the eventual selling prices of these houses. These are called comparables; “comps” in the industry lingo. They are called comps because houses similar to yours, recently sold in your area, are the measuring stick for your house’s value.
Purchase an Appraisal
Purchasing an appraisal can provide additional insight into the value of your house. An appraisal usually costs a few hundred dollars and takes a few hours to complete. The appraiser will walk through your house and take note of not only the square footage, number of rooms, and size of the lot, but also the quality of fixtures and any items in need of repairing or specialized items. Like a realtor, an appraiser uses comparables in order to value your house, but it's a much more detailed valuation.
Visit Open Houses
As houses in your area go up for sale, you can take a tour and see what your competition is. Seeing firsthand what other houses look like, their features, and their listing price will help you determine the value of your house. You will be able to compare the features of your house against your competitor’s and determine if your house should be similarly priced.
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