What is My Home Worth?

By on February 12, 2018

If you are a homeowners looking to sell your property, going into foreclosure, or looking to refinance your mortgage loan, then you are probably wondering, “What is the value of my home?” You will find that the process to evaluate the value of your property depends upon what you want to do with your home.

Determining the Value of Your Real Estate

Real Estate Values for Sale

When a homeowner decides to sell their home, the value of the home will be set not by what you think the home is worth, but what a buyer is willing to pay for your home given the current market conditions. Your best bet is to seek the advice of a professional agent before listing your home for sale.

An agent can provide you with a list of comparable homes – of similar size and amenities – in your neighborhood that have sold recently. These properties are known in the industry as ‘comps’. When selling a home, owners can use the recent selling prices of comps to determine the likely price range for what buyers are willing to pay.

Real Estate Values for Buyers

Those looking to buy real estate have a considerable influence on the value of a property – how much is it worth to acquire the home you want. To determine the value of a property, home buyers will evaluate comps and appraisal reports. This will help set a purchase price.

An agent can also show comps to home buyers. This will allow potential buyers to assess the value of similar properties. And mortgage lenders will require a professional appraisal to finance the purchase – the mortgage amount a lender will offer for a buyer is based off the appraised value. For example, if the purchase price is $200,000 and the appraised value is $190,000, the lender will calculate your maximum loan amount using the $190,000 value.

Real Estate Values During Refinancing

If you are a homeowner looking to refinance your mortgage, your lender will require a professional appraisal to determine what a potential buyer would pay if the home was sold in the current market.

Real Estate Value For a Tax-Assessment

A tax assessor will have another value for your home, which will determine a homeowners annual property tax. The “Assessed Value” or “State Equalized Value” multiplies by the local government tax rate. It is not the value a buyer or lender will use for a sale or refinancing, but it does determine the share of municipal infrastructure or services a homeowner is responsible supporting through taxes.
Even if your property is worth little to a lender or potential buyer, the state or local government still holds a high value for supporting water, local schools, etc.. So even if the market (buyers and lenders) have devalued your property, a rise in tax rates could increase the “assessed value” of your home by the local tax assessor.

You can dispute the “assessed value” and hopefully lower your taxes. Consider filing a dispute valuation with the taxing authority, and be prepared to fill out the necessary paperwork and provide the assessor’s office with evidence to support your claim that the home is worth less than their assessment.

Property Values and Homeowners Insurance

The value of a home to an insurer is going to also differ for that of a buyer or lender. A homes value to an insurer is based on the cost to replace the home, NOT the current market value of the home. At the very minimum, a homeowner should have the home insured for 100% of the estimated cost to rebuild the home – even if it is less than the market value.

Your home will always have value to you, but there will always be many opinions and ways to evaluate what your home is truly worth. It is important to understand why you want to know the value of your real estate and which institutions to evaluate with, so that you can easily navigate the confusion of multiple markets.

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