How Much Is My Home Worth?

How much is my home worth? This is one of the most frequently asked questions in real estate. Everyone wants to know how much their home is really worth. Or, they want to know how much to offer on a home they are considering. The truth is, there are several valuations of a home, but only one is indicative of what a home will sell for. To clear up the confusion, we’re going to define the different valuations.

Market Value

When people ask how much is my home worth, they’re really asking how much is the market value? What will my home sell for? According to Fannie Mae, Market Value is defined as “the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.” Simply put, assuming the seller isn’t in a rush, and the buyer isn’t in a rush, and the home has been on the market a reasonable amount of time, the purchase price of this home is its Market Value.

Appraisal Value

The appraisal value is the value placed on a home by the lender with an interest. When a lender is underwriting a loan on a home, they hire an appraiser to value the home. The appraiser is a licensed or certified third-party that uses recently sold comparable homes to provide his or her opinion of the value. This is only an opinion, and more than one appraiser may have more than one value. However, this opinion is unbiased and based upon facts related to homes of similar age, style, size and condition. An appraiser will assign value to differences in the comparable property, and make adjustments to match with the subject property. An appraiser cannot assign value to improvements or features in a subject property that are not present in a comparable property.

Assessed Value

You know when you get your tax bill, and you think, “Oh no! My house isn’t worth that much!” This is the assessed value. The assessed value is the value assigned to your home by the tax assessors office in order to determine your property taxes. An assessor will use the sales price of recent homes, the average value of improvements, and potential rental income to assign a value to your home. This value can be contested, and potentially reduced. This value is also affected by exemptions such as The Homestead Exemption. It is very important to remember that an assessed value can be higher or lower than appraisal value, or market value, and should not be used to determine the value of a home during a sale or purchase.

Comparative Market Analysis

When you’re ready to list your home, or purchase a home, a licensed REALTOR can prepare a Comparative Market Analysis. A REALTOR will use recently sold comparable homes of similar size, style, condition and quality to provide you with a range of the market value of the home. This will give you a good idea of where to start with the listing price or an offer price. Correct pricing is critical, and starting close to the market value increases the likelihood of a deal!

Are you ready to list your home? Have you found a home you want to make an offer? I’d love to prepare a Comparative Market Analysis for you! Contact me today for your free market valuation! 832-513-9931