How to Come Up With a Good Estimate of Your Property's Market Value

How to Come Up With a Good Estimate of Your Property's Market Value


 It is relatively easy to buy a house once you have acquired the necessary funds, but you might find the process of selling it a bit more complicated, primarily because you’ll find it difficult to estimate your property’s actual value. The price will change depending on a couple of factors, but to give you a straightforward answer, your house’s market value is how much a person is willing to pay for it, which will also depend on the market demand and the benefits your real-estate agent will be able to negotiate. To accurately calculate your property’s market value, continue reading the following guide.


How to Come Up With a Good Estimate of Your Property's Market Value


COMPARABLE PROPERTIES

This is one of the easiest methods with which you can evaluate your property’s value. Over 56% of homeowners in the U.S. have estimated their property’s value by looking at comparable properties. Although this method might seem simple on the surface, there are factors you’ll need to take into account. Just because the property next door was sold doesn’t mean that this is going to be the case for your property. This method, which is also known as the assessed value employs an “apples to apples” approach, which means that you'll have to look for properties your buyer might find interesting; they must have the same size, location, upgrades, and condition as your property. Make sure that they are identical or at least nearly identical to your own property. Here are some steps that will help you with the assessed value method.


  1. Look through websites with MLS listings to find the prices of comparable properties in your neighborhood.
  2. Make sure that you have three valid comps to get a rough estimate of your house’s value on the market.
  3. You may look at listing prices if there aren’t recent sales for comparable houses, but keep in mind that the numbers you’ll be looking at might not be realistic.


BENCHMARK PRICE

You can calculate a benchmark valuation for your property after you find comparable properties. For example, if you find three comparable properties, you can add all their values and divide the product by 3. Another way you can go about this is to calculate the price per square foot, which can be helpful, especially when comparable properties are larger or smaller than your own. 


FAIR MARKET VALUE

Fair market value is the price at which you could sell your property to a willing buyer when both of you know the facts and information related to the property and neither is pressured to buy or sell said property. You’re probably asking yourself “how do I go about determining fair market value for my home?” Well, it may be a bit difficult to estimate the value of your property using that method, but it’s probably the best way to do this, as you will get the most accurate estimate of your house’s value, depending on the market’s supply and demand. Keep in mind that the real estate market and the tax settings use the fair market value, so it’s important to seek the help of an expert to help you calculate it.


APPRAISED VALUE

Knowing your house’s value is important, but if you can’t do so on your own, a professional appraiser will do it for you. The appraised value is your property’s evaluation that is given by a professional appraiser during the mortgage origination process. Usually, lenders hire appraisers to evaluate your house, but you will be responsible for the appraisal process’s costs. You should take into consideration that the appraisal value won’t correspond to the market value, the fair market value, or the assessed value, but it might still point you in the right direction. The curb appeal, the infrastructure, state, local crime rates, and the amenities will have a direct impact on the appraisal price, so if you want to increase your property's appraisal value, you might want to do some improvements to your property.


ONLINE VALUATION TOOLS

If this is the first time you calculate a property’s value, you might want to use online valuation tools to help you out. Online valuation tools will require information about your home then use that information along with data from public records and make an estimated value of your property. While the result may not be accurate, these tools are convenient and easy to use. They will also give you a rough idea of how much your house might be worth. However, you must take into consideration that these tools won’t factor in the unique aspects of your house, which will make your results a bit inaccurate.


How to Come Up With a Good Estimate of Your Property's Market Value


Your house’s market value depends on many factors and time frames, as prices often change depending on when you’re selling your house. So, it is best that you consult a real estate agent before taking any steps or adding your house to the local listings. Finally, be sure to do the necessary improvements or renovations to increase the value of your house before putting it on the market.