How Much is My Home worth? Determining your Home's Fair Market Value
Whether you are considering selling your home in the near future or you simply want to have
a solid idea of the value of your home, if you are like most homeowners today you may be
aware that nailing down a solid home value in the current market is easier said than done.
The truth of the matter is that many homeowners have discovered to their surprise that their
homes are not worth nearly what they thought. As a result of the national recession and the
stagnant housing market, home prices have experienced quite a dip. Experts have even predicted
that it could take as long as 15 years before home prices make their way back up to the prices
of 2007. As a result, many homeowners simply do not know how much their homes may be worth at
the current time.
In trying to understand the real value of your home, it is important to throw many of the old
rules out the window. Your home's current value in the existing market cannot be based on what
you paid for it or even how much you refinanced it for within the last few years. Home prices
have become drastically reduced in most parts of the country and the fact of the matter is that
your home may not be worth as much as what you originally paid for it.
With that said, it is important to know how to accurately determine the market value of your property.
There are a few guidelines and tools you can use as well as considerations that you should keep in mind.
When you are interested in determining the market value of your home, a good starting point is to contact
a couple of real estate agents. Even if you are not actually in the market to sell your home right now,
many real estate agents are willing to provide what is known as a comparable market analysis or CMA. The
CMA will provide the prices of homes in your area, which are comparable to your home and which have
recently sold. Although this is not a foolproof method of valuing your home it can give you a ballpark
idea of what your home may be worth in the current market.
Another good step is to obtain a professional appraisal. The appraisal differs from the CMA in that it
is performed by a professional appraiser. You will need to pay for this service, but it can be a good
investment. The appraiser will take into consideration homes recently sold in the area while also
performing an inspection of your home in person to come up with a solid fair market value figure.
You might also consider attending open houses of homes that are for sale in your neighborhood. Never
judge a book by its cover when looking at the asking prices for homes for sale in the local area.
Attending open houses will provide you with the opportunity to see comparable homes for sale and what
they actually look like inside.
It is also possible to find a wealth of information available online that can assist you in determining
the fair market value of your home. Many websites are now offering home valuation information. Some
provide it for free while others charge a fee. Once again, this isn't a 100% correct method, but it can
be a helpful tool in determining your home's value.
There are a few things to keep in mind when evaluating the value of your home. Remember that there is
a difference between the fair market value and the value for insurance purposes. The fair market value
reflects what a willing and able buyer is willing to purchase your home for in the current market.
Insurance values sometimes reflect the amount it would cost to replace your home based on current construction
costs and the square footage of your home. Those numbers are often drastically different, so do not make
the mistake of thinking that just because your home is insured for a certain amount that this is the
amount you will be able to get for it in the current market.
Determining an accurate fair market value for a home; especially in today's market, can involve a bit of
trial and error. As a result, if you are considering selling in the near future you may find it necessary
to tweak the price a bit before you find one that will be appealing to prospective buyers.