Are you thinking of putting your home on the market? One of the first questions sellers ask is, “How much is my home worth?”
There are many ways to find an answer, from easy-to-access online calculators to in-depth appraisals. Here are some tips to help you navigate these tools and understand how much your home is worth.
Online Home Worth Calculators
Many sellers first turn to online calculators, easy to find on your favorite home search site or with a simple online search. Enter a few numbers into the calculator to instantly get a number. Online calculators can be useful when you are looking to get a ballpark figure.
However, these calculators often vary depending on how they calculate the home worth. Enter your information into a dozen calculators and you could end up with a dozen different answers. Estimates are based on a variety of factors, from public records to user-provided information.
However, online calculators are only as good as the information that is available. They cannot account for any upgrades you’ve done to your house, unique features about your home, or special qualities of your neighborhood. Unique factors like these add value but are not easily included in the calculation and thus left out of the equation.
While online home worth calculators can provide a useful starting point as you’re thinking about selling your home, they should not be used alone. Online home value estimates are just that – an estimate. Use these calculators when you’re starting out, but consult with an agent if you’re seriously considering selling your home.
Comparative Market Analysis
For a more accurate value, ask your real estate agent to provide a Comparative Market Analysis or CMA. In this analysis, your agent will combine real estate experience, housing market trends, and expertise with information about recent home sales and comparable homes in your neighborhood.
An agent is a local expert who will take the time to understand your home. They can include much more detailed information in a CMA to ensure you are getting an accurate valuation. Unlike an automated online calculator, your agent can consider unique features of your home and factor those into its value.
An agent can provide an important outside perspective as well. They understand how a possible buyer will see the value of your home, which is very important to attract the best offer for your home.
With this insight and expertise, you’ll have a much deeper understanding of your home’s worth. Your agent can also use market trends to recommend the best time to put your home on the market. And when it’s time to sell your home, your agent will use a CMA to determine the best strategy for pricing your home for sale.
An appraisal is a final step to understand exactly what your home is worth. Typically, the appraisal will come after your home is on the market and under contract. An appraisal involves a comprehensive look at all the details of your home. This includes room size and number, square footage, and above or below grade spaces. The calculation also weighs the values of similar, nearby homes that have recently sold.
Mortgage lenders rely on a formal appraisal to determine terms of a home loan for buyers. Because it is used as the basis for a home loan, an appraisal is typically performed when you have a serious buyer for your home for sale. Talk with your agent to determine how an appraisal fits into the process of selling your home.
Each of these methods can be used to answer the question, “How much is my home worth?” Online home worth calculators can provide a useful estimate in the early stages but cannot replace the expertise of an agent performing a comparative market analysis. Talk with your real estate agent to learn more about determining home worth or selling your home.
Originally published in 2018. Updated May 2021.