A Guide to Help Understand Finding Your Home Value
We all have an idea of what we think our home should be worth. When coming to that number we probably consider the amount we paid for the home, how long ago it was that we paid that price, the improvements we have made to the home, and what great things the home has provided for us over the years. While these all seem like reasonable factors into how much we feel someone should pay for our home, personal feelings and the price that the home was worth a few years ago do not play a part in calculating the current fair market value of a home.
A home’s value is based solely on the amount of money it would likely sell for in the current real estate market.
Why It’s Important to Know Home Value
It is good to know your home’s value for a few different life situations. 1. You are about to sell your home. 2. You would like to refinance your home 3. You are buying a new homeowner’s insurance policy 3. You are calculating your net worth
Ways to Determine a Home’s Value
Try to remember what you thought when you were looking to purchase your home. You had a mostly business mindset. Yes, you fell in love with the home, but if it was priced too high or had too many issues you would not have given it a second look. From a buyer’s perspective, it is a business transaction.
On another note, the fair market value of a home and the appraised value of a home are probably going to come in at two different numbers. The fair market value of a home reflects what a seller would most likely pay for the home as determined by comparable sale prices of recently sold homes in your neighborhood. The appraised value is assessed by a licensed real estate appraiser for various different reasons, and the appraised value can be different depending on the purpose of the appraisal.
In the case of fair market value, an experienced licensed real estate agent can help you to look up comparable sales and determine the fair market value of a home.
In the case of an appraisal there are many different reasons for getting one. Those include: