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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. While the past few years have been a roller coaster ride on many fronts, there was a silver lining for homeowners: Home prices have risen considerably. You might be wondering if you should take advantage of the climb in values and or tap its newfound equity. As you consider your options, a good starting point is to ask yourself: Exactly how much is my house worth?
How much is my house worth
When getting a home value estimate, consider the three main types of valuation: Fair market value: encompasses what your home looks like to prospective buyers compared to other homes in the area. Consider the sale price of a home that’s similar to yours (same number of bedrooms and bathrooms, square footage or outdoor space, say). If you to help you sell your home, this is where your agent will start: by to gauge what buyers have been willing to pay for a property comparable to yours. Appraised value: While the factors in comps, it differs from fair market value. To calculate appraised value, a licensed appraiser considers the location, size and condition of your home, and any renovations you’ve completed. The appraised value is what mortgage lenders look at when a borrower buys a home or refinances their mortgage. Assessed value: The assessed value is the assigned dollar value of your home used by local county tax assessors to determine . “Tax assessors calculate assessed value based on various factors, which may include the appraised value and the fair market value, as well as any home improvements, whether you generate income from the property, and any tax exemptions,” explains Jade Lee-Duffy, a Realtor with Reali in San Diego. Usually, the assessed value is lower than fair market value and doesn’t actually represent how much a property could sell for, Lee-Duffy says. Lightbulb Bankrate insight While an online home value estimator can be helpful in getting a sense of what your house is worth, the number you see is only a starting point, not the final word. 5 ways to find out what your house is worth
1 Enter your address into a home value estimator
Best for: Sellers, buyers or anyone curious about the ballpark value of a home There are loads of online tools that offer a quick home value estimate. These online tools — called , or AVMs — use algorithms and publicly available data, such as recent sales, tax assessments and other public records, to generate an estimate. There are many home value estimators out there, each using a different methodology, so your estimate can vary. These include: “Home value estimators are good starting points to assess the value of your home very quickly,” Lee-Duffy says. “However, this value is based on an algorithm that usually takes into account the number of bedrooms, square footage, location and market activity. It doesn’t take into consideration factors such as recent upgrades, condition of the house, curb appeal and external factors, such as traffic noise.” In addition to an online estimator tool, you might choose to obtain a cash offer from an . “Both a home value estimator and an iBuyer company provide sellers with some idea of what their home is worth,” explains Arlene Reed, an agent with Coldwell Banker Warburg Realty in New York City, but “the information from both is frequently inaccurate. The home value estimator tells you what your home is worth, while the iBuyer company offers to buy your home at what they estimate it’s worth.” Pro: The algorithms that power online estimators and iBuyer offers have come a long way. Now used by millions, they can be simple ways to get a fast ballpark estimate (or offer) just by typing in an address. Con: Take these computer-generated estimates with a grain of salt. They may sometimes be based on incomplete or erroneous data, or may not take into consideration a recent high-end kitchen renovation or bathroom addition, for example. If you obtained an offer from Offerpad, Opendoor, or another iBuyer, here’s 2 Ask an agent for a free comparative market analysis
Best for: Those who are selling or considering selling a home Real estate agents typically offer a for free in hopes of winning your business if you’re selling your house. To complete the CMA, the agent pulls data about recent sales of comps in the area. They then draw on their knowledge of the neighborhood and any special characteristics of your property to estimate its value. A buyer’s agent may also provide this same service for any home a buyer wants to on. “A good agent will have the tools necessary to drill down and find an accurate market value,” says Robert Krasow, a Realtor with Michael Saunders & Company in Sarasota, Florida. “An experienced professional follows the market, looks at home conditions and knows the neighborhood — all while making determinations using both data and their expertise.” Pro: It’s helpful to have an expert identify comps, answer questions and give guidance. Con: Different real estate agents may use different comps or have conflicting opinions of your home’s value. In addition, if there haven’t been many sales in the neighborhood or the comps are not that similar to your property, the estimate won’t be as accurate. 3 Check your county or municipal auditor s website
Best for: Those who want to understand their home’s value from a tax perspective County auditors periodically assess the value of residential properties for property tax purposes, and this information is searchable online. You can look up the assessed value of your house to see if it has appreciated, or compare the figures with other homes for sale. Pro: This objective data is easily accessible and provides another point of comparison. Con: This estimate is for the taxable value of your home and may not reflect some of the market factors that affect the sales price, such as time of year, competitiveness or curb appeal. In some localities, assessed values may be far off from market values. 4 Identify trends with the FHFA House Price Index calculator
Best for: Those who want to understand property price trends in their area over time The Federal Housing Finance Agency’s offers yet another take on home value. The tool analyzes historical mortgage data to project what homes in your state or metropolitan area are likely to be worth based on the rate of appreciation of all homes in the area over a given period. Pro: The calculator draws on data from tens of millions of home sales and offers insights about broad house price fluctuations, so homeowners can compare the relative affordability of neighborhoods over a period of time. Con: This calculator doesn’t estimate the market value of a particular house. Instead, it offers a look at or depreciation over time. While this will give you a general idea of the local market, it won’t drill down into the specifics of your property. 5 Hire a professional appraiser
Best for: Those who want the most professional and accurate home value estimate, and may want to use the data as they consult with a mortgage lender Mortgage lenders hire appraisers to confirm the value of a house before approving a loan. Some home sellers choose to take the extra step of hiring an appraiser, but it’s not required. The appraiser considers the characteristics of the property, such as how many bedrooms and bathrooms it has, as well as comps, similar to a CMA prepared by a real estate agent. Pro: Professional appraisers are typically licensed or certified by the state they work in and can provide an objective opinion of the value of a home. Con: If you’re seeking a mortgage, you’ll have to pay for the appraisal the lender orders. An an average of about $350, but can be anywhere from roughly $313 to $420, . My home s value went up What should I do
Your home’s value can rise due to a range of factors. Home prices have increased in many places recently due to a shortage of supply. Prices were also boosted recently by some of the lowest in history. Those rates have since increased, but prices remain high. If your home value has increased, you have a few options and considerations to make: You might be able to save money by eliminating private mortgage insurance. If you’re paying for (PMI) and your home’s value has gone up to the point where you now have at least 20 percent equity, you can ask your lender to . You might need to adjust your homeowners insurance policy. Your cost and coverage are typically based on your home’s value. If it has increased, you’ll want to make sure you’re fully protected. “It’s important to review your property’s value with your insurance agent yearly to make sure your residence has the proper insurance coverage,” says Kimberly Smith of Garnet Property Group in Bristol, Connecticut. You might be in a better position to improve your home. With more equity in the property, you can take advantage of a or and invest in a renovation or remodeling project. “Determining a home’s valuation is useful if you’re considering tapping into your home’s equity in the form of a home equity loan, home equity line of credit or cash-out refinance, so that you know how much equity you’ve accrued,” Smith says. You might consider selling your home. You could stand to profit if your home’s value has gone up considerably. But before putting it on the market, carefully evaluate whether it really is the right time to move for you or your family, whether you’ll be able to find a new home quickly and how you’ll pay for it. “If it is a good time, making minor repairs and decluttering your property is always going to help increase the final sale price,” Lee-Duffy says. My home s value went down What should I do
While home values across the board have increased, there could be factors beyond the homeowner’s control that can cause prices to decline. “Local political issues, , transportation and employment opportunities — or lack of these last two things — can influence home values,” says Gerard Splendore, an agent with Coldwell Banker Warburg Realty in New York City. “Selling may not be a good idea, unless it is apparent that values will continue to decrease.” If you can wait out a downturn rather than making a rash decision, that may be best. “Home property values are typically influenced by the current economic climate, as well as the supply of houses on the market, which will change over time,” Lee-Duffy says. “If you can prolong moving, housing prices will eventually start to rebound.”
What factors affect home value
A number of factors can affect the value of your home, including: The neighborhood The home’s age Its condition Its size Any home improvements or upgrades There are other factors that impact property values overall, too. These include the local housing market, economy, interest rates and tax rates, Reed says. How often should I check my home s value
While you don’t need to revisit your home’s value too often, checking on it periodically, such as once a year, is a smart move for several reasons. Knowing the current value of your home allows you to determine, for example, whether your homeowners insurance policy still adequately covers the property. “The value of your home also affects your taxes,” Reed says. “You might be able to lower your assessment.” It can also be helpful to know the value of your home so you know how much equity you’ve accumulated, which could allow you to qualify for a home equity loan or line of credit, or cash-out refinance. Of course, knowing the value of your home is very important . You’ll know where you stand with buyers, and what you could potentially take home after the costs of the transaction and taxes.
How can I add value to my home
You don’t get a second chance to make a first impression, and this bit of wisdom can apply to your home and its value. “Your property’s does make a difference,” Lee-Duffy says. “Make your home welcoming and tidy — cut your grass, trim any shrubs and add some new plants or flowers.” A fresh coat of paint either on the interior or exterior of the house will more than pay you back for the money spent, she adds: “This is one of the most cost-effective ways to improve value.” A minor bathroom or kitchen update (as opposed to large-scale renovations) can also help improve your home’s resale value. You can simply replace an outdated sink, old tiles or dated light fixtures to give these spaces a refresh. Bottom line
No single home valuation method is guaranteed to be 100-percent accurate. That’s why using a combination of resources can help give you a more informed perspective of what your home is worth. For example, you might get a free CMA and conduct your own research using an online home value estimator, as well as the FHFA calculator and county auditor’s website. Averaging together all the final values you gather could give you a more accurate picture of your home’s value. Ultimately, however, the most reliable home value estimates come from professionals who take the time to carefully assess your property based on a variety of factors. “All of the evaluation tools are useful in giving an idea of the worth of your home, but an appraiser and/or an experienced agent will be the most accurate sources for determining value,” Krasow says. “A trained professional will have an advantage, as a computer cannot determine intrinsic value or consider the condition and improvements you’ve made to your home.” SHARE: Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Related Articles