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What’s Your Home Worth?

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HousingDo you know what your home is worth? It can be tough to figure out exactly what your home is worth since, in reality, “worth” is fairly subjective. Different people place value on different things. That means that something you find charming in your home might be repulsive to someone else. And, of course, you can’t forget your sentiment regarding the home means that you probably value it higher than a casual observer would.

Of course, even appraisers have different ideas of how to value a home, and valuation models based on computer algorithms can result in different estimates for the same home. If you are preparing to sell your home, or if you are looking to refinance, here are some things to consider about what affects the value an appraiser attaches to your home:

Location

You always hear that the most important thing is “location, location, location.” This is one of the prime factors that goes into your home’s appraisal. A 2,000 square foot home in a desirable neighborhood close to amenities is considered more valuable than a similar-sized home in a remote location, or a rough neighborhood. Nearby schools, parks, and medical facilities all figure into the value your home derives from its location.

How Other Homes Have Sold

The price similar homes in your neighborhood have sold for matters. We bought our home for $187,000 four years ago — just before everything crashed. The county appraises it for $181,000 for tax purposes. However, in our subdivision, similar homes have been selling for between $165,000 and $178,000. Those sales numbers are going to influence the “market value” of our home if we decide to sell or refinance.

Condition of Your Home

Have you taken care of your home? It’s important to realize that a home that has been neglected is not going to be considered of as high a value as a home in good condition. This includes cosmetic issues as well as major issues. No matter the appraisal, if someone drives up to a home with poor curb appeal, it isn’t going to be “worth” as much to the potential seller. Cleanliness is important as well when considering the worth of your home.

Upgrades and Amenities

If your home has upgrades, such as granite countertops, or amenities, like a deck, then it is worth more. However, understand that if the upgrades are put in wrong, or with poor workmanship, they can actually work against you. Realize, too, that some upgrades aren’t worth as much as others, and that in some housing markets, or locations, added amenities can work against you.

Don’t Rely on Valuation Web Sites

Be wary of the home values you find on valuation web sites. Valuations can vary widely between sites, as well as change significantly from month to month. In fact, there are cases in which valuations on these web sites are 50% higher or lower than an appraised value. A computer can’t be on the spot, and have all the same interpretations as a human. Additionally, adjustments to an algorithm, or a mistake in the statistical model, can throw off the valuation you receive online. While these can be somewhat helpful, remember that they are only estimates, and a local appraiser is likely to have a much better grasp of the situation.

(Photo: james.thompson)

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10 Responses to “What’s Your Home Worth?”

  1. JamesV says:

    I’ve been curious on how to find out the real market value of your home. I had a Realtor give me some figures last year in 2010, but I didn’t agree with them at all since they took into account 1 house (foreclosure) two blocks away that sold in 2010 for $83,000 less than what I paid in 2007. But that house did not have any of the amenities, and the location that our home does. I’d be curious to hear people’s feedback on this. Thanks.

    • billsnider says:

      They use what you paid for it and then adjust it up or down in realtion to how the market sold in the last few years.

      Bill Snider

  2. billsnider says:

    I use http://www.zillow.com.

    I was wondering if any of you know of other websites.

    Bill Snider

    • Brendan says:

      http://www.eppraisal.com is another…but I prefer Zillow. For those that don’t know, if you own your hoem you can log in to Zillow and “claim” your house. ou will then be able to correct any false information and input any recent upgrades or remodels. The house estimate created by Zillow is called a ‘Zestimate,” and is based on as much information as the site can generate about your home.

      However, specifics such as upgraded amenities, new appliances, etc. can’t be accounted for without you inputting them. Doing this will make your Zestimate much more accurate.

  3. Strebkr says:

    We refinanced this year so I had a “real” appraisal done. It came back 14% higher then Zillow. Zillow isn’t perfect. It doesn’t know you have an updated kitchen or a finished basement. It just applies market movements based on whats happened around you. Its just one of many tools you can use when starting to estimate value. The best though, is a professional valuator who will come in and look at everything.

  4. freeby50 says:

    Zillow and Eppraisal are the kind of sites that Miranda points out can be up to 50% innaccurate. Usually Zillow is right within 5-10%. However 20% of the time its off by 20% or more. They are a decent starting point but take them with a grain of salt.

    I’d also say that your tax assessment is usually not very useful for appraising fair market value.

    • Brendan says:

      60% of the time, it works every time! :)

    • Strebkr says:

      Even tax values can be argued. A determined person with the right kind of argument can have their value lowered. Again, its a starting place. You should probably use a combination of many valuation tools.

      • Dave says:

        I live in a development with about 4 different style houses. Zillow has the tax assessment values (reassessed in 2011) and they are all over the map – for 4 houses in my development that I know are exactly the same as mine, the assessment range is about $20K, and mine is at the top… I’m thinking I should push for a reassessment…

        • Strebkr says:

          Dave – I fought mine and won, so it can be done. They won’t ever look at it until you ask them to, so get your paperwork in on time so they can review it.


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