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What’s Your Home Worth?

Do 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 [3], here are some things to consider about what affects the value an appraiser attaches to your home:


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 [4], 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 [5] 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 [6])