Assessing the Value of Your Home

Whether you’re considering a home refinance or looking for some other reason, there are plenty of situations where you might want to know the value of your home. A home is truly only worth what someone will pay for it, but there are methods for determining the general market and getting a good idea of what kind of value your home has.

At American Loans & Mortgages, we’re here to help with all mortgage areas. Let’s look at a few tools that are available to you when it comes to determining home value.

Online Tools

There are dozens of online home value estimators, typically offered by lenders or real estate sites like Zillow or Redfin. These tools use public records, such as property transfers, deeds of ownership and tax assessments, to predict home values based on recent sales and comparable properties.

It’s important to remember that these online tools are best used as good estimates, not exact figures. They’re mostly for lead generation. They do use a “confidence score,” which determines how precise the score might be, but each site has its own calculations here.

FHFA House Price Index Calculator

If you’re wary of these public tools but want a quick estimate, try the Federal Housing Financing Agency’s house price index calculator. This uses a more scientific approach that tracks sales back to the 1970s, and can give a good idea of how much your home has appreciated over time.

Professional Appraiser

Lenders require appraisal before approving a mortgage, but you can hire one privately at any time. Appraisers are third-party, objective assessors who evaluate the market, the property, and her comparable properties when determining the value of your home.

Comparable Properties

Appraisals and online sites both rely on recent sale value of comparable properties, or “comps.” You have to use good judgment if you’re doing this on your own – just because there’s a property close to yours doesn’t mean it’s necessarily comparable. You have to take an apples to apples approach. If there aren’t many recent sales in your area that you can find using a local MLS service, look at listing prices for a decent idea – just remember that these might not necessarily be realistic. In general, shoot for at least three valid comps to come up with a solid range of market values for your home.

For more on assessing home value for any reason, or to find out more about our mortgage services, speak to the pros at American Loans & Mortgages.