How much is my house worth? 5 ways to find your home's value
December 8, 2022 5 min read
Thinking about selling your house? The first thing you might want to do is figure out how much your home is currently worth. This information could help you decide whether it’s time to cash in on any equity you’ve built or if it’s best to wait.
Home value can also factor into decisions about refinancing a mortgage, appealing property taxes, creating a remodeling budget and more. But how do you know what your house is worth?
Keep reading to learn how these strategies can help you find the value of your home.
- Fair market value is the price a buyer and seller agree to under normal market conditions.
- Curb appeal, location, home condition and inventory can affect property value.
- The national median home price is currently $398,500.
- Using an online estimator, researching similar properties or working with a real estate professional are a few ways to find a home’s value.
How to find the value of your home
Current market value refers to the price a buyer would pay to purchase a home. This value can go up or down over time depending on market conditions—like interest rates or the number of available homes. Factors like road noise, school districts and square footage can also affect home values.
Whether you want to move, remodel or refinance, knowing how much your home is worth can help you make informed financial decisions. Calculating your home’s value might seem intimidating at first, but these simple strategies can help.
1. Check out comparable homes
You can get a sense of your home’s fair market value by comparing it to similar properties in your area. It might help to look for listings that have comparable features, such as:
- Number of bedrooms
- Number of bathrooms
- Yard size
- Square footage
- Floor plan
- Home age
Seeing how your home stacks up to nearby listings could help you determine a potential asking price. But remember, this number is just a ballpark figure and may not represent your home’s actual selling price.
2. Use a home value estimator
An online home value estimator—or automated valuation model (AVM)—is a tool that uses information from real estate listings and property records to find a home’s market value. An AVM can generate an estimate in minutes using a few details, like the home’s ZIP code or size.
Some AVMs might include things like school districts or resale history in their estimates. But other details, such as recent upgrades or noise level, may not be considered. Also, home values may vary from one AVM to the next because each tool may use different information to generate estimates.
If you want to research how much your home is worth, an AVM could be a good starting point. Just remember that AVMs are typically used for rough estimates rather than precise home valuations.
3. Analyze trends with the FHFA House Price Index calculator
The Federal Housing Finance Agency’s House Price Index (HPI) takes a different approach to property valuation. Instead of using data from recent sales, this calculator uses an area’s historical mortgage data and appreciation rates to estimate home values.
The HPI tool could help you understand property value trends in your area. But it can’t estimate how much a specific home is worth. Still, this calculator could offer some valuable insights about your local market. If the HPI finds that homes in your neighborhood often appreciate in value, this information might be an appealing selling point.
4. Request a comparative marketing analysis
Real estate agents typically create a comparative market analysis (CMA) to estimate how much a home is worth. This report determines a property’s value by comparing it to similar listings that have sold in an area.
Real estate agents may have access to information—like final sale prices and overall market conditions—that you might not find on your own. They can also adjust the CMA to account for unique property features like pools, amenities, lot size and more. For this reason, a CMA estimate might be more accurate than one based solely on your own research.
You could contact local real estate firms to request a CMA. Some agents may even offer this service for free.
5. Hire an appraiser
Hiring a professional real estate appraiser may be one of the most effective ways to determine a home’s value. An appraiser creates home valuation estimates based on the following information:
- Home size and floor plan
- Interior and exterior condition
- Comparable nearby properties
- Neighborhood amenities
- Previous appraisals
Lenders will typically hire an appraiser to assess property value before they approve a mortgage application. But if you want to refinance a mortgage, take out a home equity line of credit or appeal property tax assessments, you might consider hiring an appraiser on your own.
There are some steps you could take ahead of time to help get the most out of your home appraisal. Decluttering the garage, keeping home repair records or making small upgrades may show the appraiser that a home is well cared for.
Factors that affect property value
There isn’t an exact science for finding out how much your home is worth. That’s because property value can change over time based on a variety of factors, including:
- Home age
- Lot size and type
- Square footage
- Repairs and upgrades
Other factors—like interest rates and local housing market conditions—may also affect home prices. While some of these elements are outside your control, there are things you could do to potentially increase your home’s value.
How to increase your home value
Whether you want to sell your home or simply renovate it, keeping property value in mind can help you get the best return on your investment. Some projects may add more value to a home than others. For instance, kitchen upgrades have the potential to generate a 72% return on investment. If you’re not sure where to start, it could be helpful to contact a local real estate agent or appraiser.
In the meantime, here are some value-adding projects you might want to consider:
Interior home renovations could help you get more enjoyment out of your space. They could also make your home more appealing to future buyers. According to the National Association of Realtors® (NAR), these projects have the most value-adding potential:
- New floor installation
- Kitchen remodels
- Window replacements
- Bathroom upgrades
- Refreshing paint
- Adding extra square footage
A home’s exterior often serves as the first impression for potential buyers. So it’s no surprise that curb appeal can be an important part of property value. A clean and inviting exterior could boost home value, so you might consider investing in projects like:
- Building a garage
- Updating existing garage doors
- Replacing exterior doors
- Adding outdoor features, like a new patio or outdoor kitchen
- Installing new landscaping
- Power-washing the home or driveway
Sustainable home features
Investing in sustainable home features could help cut utility costs. These energy-saving additions may even increase a home’s value:
- Installing energy-efficient thermostats
- Upgrading to energy-efficient appliances
- Adding new installation
- Replacing older windows and doors
- Installing a solar energy system
Does solar increase home value?
Adding solar panels to a home might be another eco-friendly way to increase property value. According to a recent NAR survey, 77% of respondents stated that solar panel homes are available in their market. And 36% of those surveyed believed solar panels add to a home’s value.
Installing solar panels may result in tax breaks, too. The Internal Revenue Service offers a residential energy efficient property tax credit. Depending on the purchase date, homeowners could save between 22% and 30% on their installation costs.
Estimating home value in a nutshetll
The home valuation process can be complicated. Luckily, there are several easy ways to find a home’s value.
Whether you want to renovate, sell or refinance your home, it’s important to know how much your home is worth. Researching similar properties or using online tools might be a good place to start. If you want a precise estimate, though, it could be helpful to consult a real estate agent or professional home appraiser.
Home valuation is also an important part of the homebuying process. Understanding fair market value may help you spot a great deal or avoid overpriced properties. If you’re planning your next move, you may want to read about these important questions to ask before buying a home.