Regardless of estimates and appraisals, a home is only worth what a buyer is willing to pay to acquire it; however, when selling a property, it is crucial that sellers have a general idea of the market value of their home in order to determine a selling price. With nationwide prices fluctuating, home values can change rapidly, and making an accurate estimate can be tricky. As such, the optimal way to estimate a home’s value may simply be to get multiple opinions.
While they may not provide a perfectly accurate estimate, here are six methods to finding out the value of your property and calculating your home value without an appraisal:
Consulting a real estate agent can give homeowners a fair impression of their home’s value; however, for best results, homeowners should consider getting several estimates, as they can fluctuate greatly between agents. As such, you should generally begin with an average of these estimates and make small adjustments upward or downward if necessary.
If you do not feel confident in your real estate agents, you can additionally hire an independent appraiser to review your home and calculate an unbiased, professionally-determined value. With pressures from banks that have been hurt by previous optimism, appraisals can be overly critical, and having an outside opinion can better put the value into perspective if you believe the lender appraisal to be incorrect or biased.
To determine a property’s value, appraisers use the method of consulting sales records for similar properties, also referred to as “comparables.” Appraisers typically use this method by identifying homes that have sold within both a reasonable distance and timeframe. Ideally, search for properties that have sold within six months of the appraisal and within one mile of your home. Note, however, that the average time on the market within the subject area may require adjustments of this ideal timeframe; for instance, in a rapidly appreciating market, try to find comparables less than three months old for a more reliable pricing estimate.
In recent years, the slowing of the housing market has contributed to fewer available examples of comparable houses; however, with a wealth of information at your fingertips, the internet could be just the resource for calculating your home’s market value. In fact, many websites will provide general pricing ranges of comparable homes within your region. When using this method, be sure that you are making reasonable comparisons to avoid incorrect estimates.
Consult data from the various organizations that track home price fluctuations, such as the National Association of Realtors (NAR), the Office of Federal Housing Enterprise Oversight, and the Case-Shiller index. While these institutions analyze pricing fluctuations in a larger scope, you can still use these statistics to develop a rough idea of the housing market trends in your vicinity.
Alternatively, consider collecting local data from your region’s multiple listing service; be sure to gather sufficient data to be able to identify and rule out unusual cases.
While the housing market will not always give the most accurate impression, you can still develop a reasonably decent estimate by observing these pricing trends. If you live in one of the 10 chief housing markets tracked by the S&P/Case-Shiller Home Price indices, you can find information on future contract pricing to find out investor opinions on homes in your area, and whether they find it bearish or bullish.
By employing one or multiple of these methods, you should be able to formulate a reasonably accurate price range for your home and calculate your home value without an appraisal. However, when doing so, remember to be as objective as possible so as to avoid personal biases, such as wishful thinking, from skewing your estimate.
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