A home value estimate helps determine a home’s market value. Whether buying or selling, home value estimates can help you remain competitive in the housing market.
It’s key to start off with an understanding of how you can find your home’s value. From online home value calculators to comparative market analyses and more, you’ll find there are a few ways to estimates your home’s value. There are also home improvements that can help boost its value, while other issues that, if they remain unaddressed, my cause it to decline.
How to find your home value estimate
To estimate your home’s value, you can choose to use one or more of the below to compare your options. The following is a list of popular ways to calculate your home value:
- Online home value calculator
- Comparative market analysis
- Hire an appraiser
Online home value calculator
Using an online tool for home appraisals, like a home value calculator, is easy and accessible. If you're interested in doing research on your own for your home or prospective homes, a Home Value Estimator can help you get started. You simply plug in the address of the home and it’ll provide you with an estimated value, along with a list of recent sales in the neighborhood and their values.
Comparative Market Analysis
A Comparative Market Analysis (CMA) is how real estate agents assess the value of a home. They usually do this by evaluating other homes that have sold in the area, combined with various online calculators and other home appraisal resources. To obtain a CMA, you can contact a local real estate agent and they’ll usually provide it to you for little to no cost.
Hire an appraiser
Professional home appraisals usually cost anywhere from $200 to $600 depending on the size of the home. Home appraisers are licensed and trained professionals who conduct visual inspections, a comparative market analysis and provide a report at the end detailing everything that went into their appraised value of the home.
What affects the value of my home?
The value of your home today may not necessarily be the value of your home tomorrow. There are several factors that drive its evaluation such as:
- Housing market
- Comparable homes
- Age and condition
The housing market has one of the biggest impacts on the value of your home. In times when there are more buyers than sellers, it's considered a seller’s market. This type of market can make your home a hot commodity which can potentially drive up the value. When there are fewer buyers than available homes for sale, it’s considered a buyer’s market. This could potentially drive down the value of your home.
Other homes in the neighborhood influence the value of your home as well. These are known as comparables or "comps". One way to initiate home comps is by looking at the prices of homes like yours that have recently sold to help determine your home’s potential value.
For example, if you have a ranch style home or are looking to buy one, compare its estimated value to a recently sold ranch style home in the neighborhood. Keep in mind other factors such as square foot, location, bedroom and bath count, etc. If your home is a ranch style and is located on a more desirable part of the block, then you’ll want to compare it to a ranch style home in the same area. However, if there are no comparable ranch style homes in that area, take a look at two-story homes on the same block instead.
Age and condition
The age and condition of your home are additional factors that affect the value of your home. For example, an older home that isn’t updated will be valued less than a newly updated home, even if the newly updated home is smaller. If the economy isn’t doing well, however, then your house may not be valued as high as it should be, even with recent upgrades.
When calculating home values, location may pull more weight than size. Proximity to a good school district, desirable location such as a lake, beach, mountains, etc., public transportation, shopping and a bustling job market will affect the value of a home.
Although location may be a top priority, home size is still a factor in evaluating value. It’s done by price per square foot; however the price per square foot can vary. Living space such as bathrooms and bedrooms drive up the value of a home. For example, if you have a 2,000 square foot home with a big garage, two bedrooms and one bathroom it'll likely be valued less than a 2,000 square foot place with a smaller garage, three bedrooms and one bathroom.
The five biggest upgrades that can increase your home value
If you’re planning to sell your home in the future and are looking to drive up its value, here are a few projects you may want to consider:
- Expanding your home
- Adding energy efficiency items
- Roof replacement
- Updated plumbing
- Finishing your basement
Expanding your home
Expanding your home could be as simple as knocking down walls and as involved as building a second floor or an additional wing. Although knocking down walls doesn’t technically increase the square footage, it can make the layout of the house more open and therefore more desirable than other houses for sale in the area.
Add energy efficiency
Energy efficiency, in any capacity, is a desirable feature for buyers in the market. This could mean updating your heating/cooling system, installing solar roof panels or replacing or even sealing your windows.
A sturdy roof is important for the infrastructure of the house. As a buyer, finding a house with an updated roof is optimal. Buying a new home and finding out the roof needs to be replaced is a large financial project to take on. As a seller, putting your house on the market with an updated roof raises the desirability of your home.
Updating your plumbing can mean anything from installing low flow plumbing fixtures to replacing a septic tank. Putting a house on the market with an updated plumbing system is desirable from both a cost perspective and convenience perspective for a buyer and can raise the value of your home as a seller.
Finish your basement
Selling a house with a finished basement can increase the value dramatically. It can raise the operable square footage of the house and is desirable for many families. A finished basement means it has a full electrical system and finished floors, walls and ceilings. An easy way to identify a finished basement is if it’s ready to live in or can serve as an additional room such as a place for relatives to stay, a home office, or a child’s playroom.
If you’re looking for fun weekend projects to help upgrade your home, these eight home improvement ideas might inspire you!
The biggest factors that can decrease your home value
Oftentimes, homeownership is one of the biggest financial investments you’ll make. It’s important to be aware of what could lower your home’s value. Just like any investment, you want your home value to increase over time. Here’s a list of some things to look out for:
- Neglected repairs or updates
- Outdated rooms and appliances
- Poor aesthetics (e.g., overly dark or bright paint, landscaping etc.)
- An old or leaky roof
- Noisy location
There’s also other dealbreakers that homebuyers look for when searching for their next home that should be considered when thinking about home repairs and upgrades.
Pro tip: The five small repairs that could make the biggest difference
- Installing a security system
- Updating fixtures
Installing a security system
Installing an alarm system can be enticing for a potential buyer. Access to safety in your own home is a high priority for many. Although this may not drive up the value of your home, it is a nice security feature that another home on the market may not have.
Updating your bathroom or kitchen fixtures are functional updates that can go a long way for a future buyer. It increases the aesthetics of the home and can help transform an outdated kitchen into something more modern.
Landscaping is another aesthetic improvement that goes a long way towards selling your home. The curb appeal of the house is the first thing a buyer will see and is often something that may sway a buyer as well as increase the desirability of your home, along with its value.
Patchwork can mean anything from re-paving your driveway to fixing cracked ceilings and covering up holes. This kind of repair improves both the quality and the aesthetics of your home.
Although improving the decor of your home may not drive up its market value, it can make the home look more desirable to the buyer. Placing flower arrangements, centerpieces or hanging artwork could improve the look of your home and inspire buyers while you are selling.
Ready to find your home’s value?
Calculating your home value is important when you are both buying and selling a home. Home value estimates give you insight as to what you could gain financially and can help form a strategy on how to move forward.