How to Estimate the Value of Your House
There are many reasons to for wanting to estimate the value of your home. You could be trying to determine your net worth, refinancing your mortgage, selling your home or just be curious. Depending on the purpose of the inquiry as to what the value of your home is, it may change the factors that determine the value. For example, the value used to determine the amount of taxes you pay--the assessed value--may vary from town to town or state to state. The value used to determine how much you can sell your home for will likely be different than the value used to determine whether you can refinance.
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Things You'll Need
- Paper
- Pencil
- Computer with an Internet connection
- Telephone
- Calculator (optional)
Instructions
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1
Call your insurance agent to ask how much the replacement value is, per square foot, in the area your home is in. Multiply the square footage of your home by the replacement cost the agent provided you to determine the replacement value of your home. Write the replacement value down on a piece of paper.
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2
Log onto the Internet and search your county's property appraiser or assessor's website, listings by real estate agents and other sites that list the homes sold in your immediate area (within 5 miles) and their prices. Obtain the tax assessment of your home and write that figure down. Obtain a list of homes sold in your area with the same approximate square footage. Do not include homes that are for sale but not sold. Exclude any homes that have not been sold in the last six months (unless you live in a sparsely populated area where only one or two homes have been sold in the last six months). Exclude homes that are not comparable to yours in size, amenities or features (for example, if you have 3 bathrooms and another home only has one, their value will mostly likely be significantly less than yours).
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3
Find the average price of homes sold in your area by adding up the total sales price of the homes and dividing by the number of homes you have identified as comparable to your home. Write the average price down. Add up the total price of all the homes on your list. Divide by the total square footage of all the homes on your list. Take the result of that mathematical equation and multiply by the number of square feet in your home. Write down that result.
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4
Subtract the cost of any necessary repairs that need to be made to your home, such as flooring that needs to be replaced, dry rot that needs repaired, a leaking roof, etc. from each figure you have listed on the separate piece of paper. Add the cost of the upgrades in you home such as granite counters, a workroom in the garage, a built-in barbecue, etc., to each figure listed above.
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Determine the range of your home's value by using the lowest number your wrote down from your calculations as the least amount your home is worth, and the highest number you wrote down as the highest amount your home is worth.
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Tips & Warnings
The assessed value of a home is the value placed on a home for tax purposes. The appraised value is the amount an appraiser determines the value is for purposes of using your home as security on a loan. The market value is the value that you would generally expect to get if you sold your home, although with recent market issues, that may not be true. The replacement value is the amount of money it would take to rebuild your home if necessary.
If you are selling your home and you are using a realtor, the agent is generally happy to give you a free estimate. If you are not using an agent, you may want to pay for an appraisal to make sure your home is properly priced.
If you are attempting to refinance, the mortgage company will insist on having their own appraisal. You will generally be charged for the appraisal whether they agree to refinance your loan or not.
Some states use the amount the home was sold for as the value they assess for tax purposes. You may want to exclude that figure in your calculations if you live in such a state.
There are many different purposes for assessing the value of a home, each purpose necessitating its own method for determining value. The method above will only give you a good rough estimate or range of your home's value.
References
Resources
- Photo Credit Model Homes image by Chad McDermott from Fotolia.com
