Tips to Get the Best Property Valuation

While the US housing market has faced some tough times, things have been pretty good recently. Homeowners have seen an increase in their net worth since home prices have increased, and that extra increase in net worth is directly caused by home equity. And equity is calculated as your home’s current value subtracted by what you owe on the loan.

There’s no straight answer to what a house is worth. If you think about it, a house is worth the amount another person is willing to pay. But in more realistic terms, the value of your home depends on many factors, like the market, and the value could also differ if you ask a lender, an agent, or a professional home valuer. 

Types Of Home Valuation

There are usually three main kinds of home valuation in the housing market.

  • Fair market value: This means how much has been paid by buyers of other properties similar to yours. This is calculated by the price of homes in your area similar to yours in terms of the number of bedrooms, bathrooms, square footage, and outdoor space.  
  • Appraised value: This can only be determined by a licensed appraiser considering the location, size, and condition of your home, including renovations if you have done any. 
  • Assessed value: This value is calculated by local county tax assessors. It is used to determine property taxes. 

How To Calculate Your Home Value

These are the best ways to calculate the value of your home, whether you’re looking for spacious condos or single-family houses for sale in Georgia.

Use An Online Valuation Calculator

This is probably the easiest way to calculate the value of your property. Both sellers and buyers can use online valuation calculators to know the price of a property. This valuation method is quite popular; according to a survey, 22% of US homeowners have used an online valuation calculator to calculate their home’s value. 

These online valuation tools are more accurately called automated valuation models, or AVMs. They use algorithms and publicly available data, like recent sales, tax assessments, and other public records, to arrive at an estimate for properties. 

While AVMs use information such as the number of bedrooms, square footage, location, and market activity to calculate home prices, other factors such as recent renovations, condition of the house, and curb appeal are left out. However, AVMs remain very easy to access and readily available.

Get CMA From A Real Estate Agent

For an estimate more comprehensive than AVMs, you can consult a local real estate agent for a CMA (Comparative Market Analysis). A CMA will give you a more professional evaluation of the home with an estimate of value that can be used for a house listing.

A CMA can be free or at a minimal cost, depending on the real estate agent. The problem with getting CMAs from real estate agents is that they may use different comps and have different opinions regarding your home’s value. And to have more accuracy, you may want to consult two or more agents to compare their opinions.

FHFA Price Index Calculator.

AVMs are the fastest ways to get an estimate of your home. Still, if you want a more accurate yet quick estimate, you could consider the Federal Housing Financing Agency’s house price index (HPI) calculator.

This calculator uses a “repeat sales method,” to estimate your home’s value. The FHFA database contains millions of mortgage transactions collected for decades. The FHFA has also been tracking changes in the values of homes from one sale to the next. Both of these data are then combined to estimate the value of your home. 

Hire A Professional Valuer

Hiring a professional valuer or home appraiser is the most accurate way to get your home value estimate. Lenders require a home appraisal before approving a mortgage for those looking to get a mortgage. You can easily hire a professional valuer for $320 to $420. Many homeowners in the US hire appraisers for their home valuation, and a survey put the figure at 28% of homeowners. 

A professional valuer will consider the market of your home, which means the location, particularly the house’s features, including renovations and all the comps, including the sales, listings, vacancies, and cost, compared to similar houses in the same market. That data is put together to arrive at a final valuation for your house. 

Conclusion

No one method of valuation you use would give a completely accurate figure, and we recommend combining multiple methods for a more comprehensively precise value. However, if you don’t want to go through every option, consider consulting a professional valuer as it’s the most accurate of all the methods. Don’t mind the cost of hiring a professional valuer, you’re better off with a proper estimate, and it could help you gain more money from your house than selling without an accurate appraisal.

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