Understanding the value of your property is important when you are moving and looking to buy a new home. You might find that your real estate investment has gone up since you originally bought it, that it is about the same price, or that the market has dipped. Even if you are not looking to move right now, it is still useful to know the approximate market value of your house.
Finding Values Online
Some online estimators can help you determine the worth of your house, based on details such as its location and what prices homes sold for recently in that area. The good thing about these calculators is that they show a figure almost immediately when you enter the data the software asks for.
You will likely be prompted by an online calculator to enter the type of home it is, the year it was built, how much you paid for it, and the number of rooms (bedrooms and bathrooms). However, that figure is only an estimate of the neighbourhood.
The number is only as accurate as the amount of public data that the specific website has access to. A real estate agent can provide more accuracy, as well as additional information from other sources.
Getting a CMA
A realtor understands how to do a comparative market analysis (CMA) to find your home’s value. To be as precise as possible, this professional looks at nearby homes that are similar to yours (comps); they have the same number of bedrooms and bathrooms as yours, as well as a similar-sized lot.
Next, the realtor typically averages the figures of the handful of comparative properties. Then they have an accurate idea of your own home’s worth. This professional also likely has a lot of experience with the market that the online calculator mentioned earlier does not; they will factor in their knowledge with the numbers.
Assigning a Value is Difficult
When it comes to putting a number on your home when you’re selling it, this activity is very difficult for most people. It is tough not to think about all the memories you have had there and the effort you have put into home improvement projects.
It is hard to be objective, which is why a realtor will help you to do a CMA and suggest a price. Of course, that is only a suggestion and always remember that you are in control and can set the price. But if you go significantly higher than suggested, you have to be ready to explain why to those who are looking to buy.
Why is Knowing Your Home’s Value Important?
Understanding the worth of your existing home will help you to understand how to price it and then calculate what you can afford when looking for a townhouse or another type of house. After all, you are both a buyer and a seller.
When looking for a new property, the bank will look at the appraised value of your home as part of the mortgage approval process. So, it is in your best interest to know as much as you can beforehand.
What Else to Consider
Other details affect the value of your home too. For example, you don’t want to include comps that are on opposite sides of major roads or railways. While you might not realize it, these dividing lines can make a difference from a financial perspective.
Also, when comparing similar properties, try to get within a 10 percent variance of the square footage, if possible. Look at properties that were built around the same time as yours when making comparisons too.
Another factor that affects your home’s market value is curb appeal. If it looks outdated, it is likely to get a lower price than one that has a beautiful garden and was newly painted.
Finally, consider any upgrades you or the other owners of the other homes have done that increase its sale price. There might also be additional amenities in them that increase the property value.
Final Words on Home Value
When you are ready to buy a house, it makes sense to know the worth of your current property going into the process. Getting a CMA from a real estate professional is part of the process, as is looking at online listings to get an idea of what you can afford and what kind of house you would like to live in one day.
When you sell your home and buy a new one, you are moving into the next phase of your life. It is an exciting time, and you can feel good about the investment you are making in your future.
