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What’s your home worth? Take these steps to find out

A two-story single-family home with attached garage and front path
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If you’ve been reading about record-breaking home prices, you might be thinking about how you can cash in on all that real estate action. Of course, your home’s value is ultimately up to the market: What it’s worth is what someone is willing to pay for it. Before you try to attract a buyer (or multiple buyers for a bidding war), though, do some research to get a good idea of the kind of check you can expect if you sell your home.

5 ways to estimate your home’s value

1. Use an Automated Valuation Model

An Automated Valuation Model (AVM) is a tool that leverages data to deliver a rough estimate for a property’s value. An AVM combines the home’s characteristics — the year it was built, the number of bedrooms and bathrooms, and other basic details — with information about other values in the area for an automated estimate. These aren’t exact valuations; rather, they offer a good baseline, and they come with the benefit of speed since they are typically available online within a few seconds.

2. Conduct a competitive market analysis

You’ll hear real estate agents talk about comps, which is shorthand for other properties that are comparable to yours. If you’re working with a real estate agent, the agent will first conduct a competitive market analysis, or CMA, before listing it. This process involves looking at properties similar to yours within a certain radius that have recently sold to get a sense of where your home fits in. The agent will also help you understand which factors make your listing more or less competitive. If you live in a condo in Phoenix that comes with a parking spot, for example, your listing is going to be priced higher than a similar condo without any dedicated place for a vehicle.

3. Consult public records

While you might be focused on your home’s value in the eyes of a prospective buyer, you can also get a sense of what your property is worth through the lens of the government. Use your county auditor’s or county assessor’s website (the title of this office varies by location) to track its assessed value. (The assessed value is used to calculate another piece of the homeowning equation: property taxes.)

4. Use the calculator from the Federal Housing Finance Agency (FHFA)

In addition to using information from your local government, the federal government has a helpful tool. The FHFA’s Home Price Index (HPI) Calculator can give you a rough estimate of how much home values in a Metropolitan Statistical Area (MSA) have appreciated or depreciated in a certain period of time. So, for example, if you bought a home in Flagstaff, Arizona, in the first quarter of 2015, you could use the FHFA’s calculator to see how the housing market in that area has changed. With this method, you’ll get a good idea of your overall city, but you won’t be able to drill down to your specific neighborhood or street, however.

5. Pay for a professional appraisal

Rather than relying on historical data or a collection of online information, you can find out what your home is worth via a real human who has years of experience studying and processing those numbers. Professional appraisers are licensed experts in estimating property values. This will cost money — appraisals tend to cost in the $300 to $400 range, according to figures from HomeAdvisor — but the price tag can be well worth it, because when you go to sell your home, you already have a solid grasp on its value.

Appraised vs. assessed vs. fair market value

As you try to get an idea of what your home is worth, go into the process with the knowledge that the concept of “value” can carry a different definition depending on who’s assigning it.

  • Appraised value – The appraised value of your home is the number assigned to it by a professional appraiser. This value is especially important when a homebuyer is getting a mortgage. The lender will typically require a professional appraisal to verify that the borrower hasn’t agreed to an unrealistic valuation.
  • Assessed value – The assessed value of your home is the figure assigned to it by the county where it’s located for property tax purposes. While an appraisal involves someone inspecting the interior and exterior of your home, assessments are often conducted in a mass approach by using pricing trends.
  • Fair market value – The fair market value of your home doesn’t involve a professional. Instead, it involves other people just like you who might be willing to pay more because they love a home or a certain neighborhood. So, for example, an appraised value might be $300,000, but a recent surge in buying activity and limited supply might motivate a buyer to go above that price. On the flip side, keep in mind that those buyers might be willing to pay less than what you believe it’s worth, too.

5 key factors that impact home values

  1. The property itself – How old is your home? How big is it? Have you maintained it well while you’ve lived there? If you have regularly invested in upkeep, your home will likely be worth more than a similar-sized property that needs a new roof and new windows.
  2. Location – Where that property sits can be equally as important as how it looks. A home overlooking the ocean will naturally carry a much higher valuation than a nearly identical home that overlooks a gas station. There are other key considerations, such as the neighborhood’s walkability, the caliber of the public schools, the level of crime, and the number of employment opportunities.
  3. Comps – Take a look at homes nearby that sold within the past few weeks or months. Remember to narrow your comp search to properties that share many of the characteristics of your home: similar square footage and similar amenities.
  4. Recent renovations – As you look at comps, remember that a three-bedroom home isn’t the same as the three-bedroom home at the other end of the street with a newly-remodeled kitchen. If you have invested in improving  the living experience while there, chances are those upgrades can increase its value for the next owner.
  5. The economy – Home values are also subject to bigger economic forces completely out of your hands. The 2020 and 2021 housing market served as a prime example. The pandemic-fueled rush to buy real estate has paved the way to huge jumps in value. According to findings from the National Association of Realtors, median existing-home prices increased by more than 13 percent between November 2020 and November 2021.

How often do home values change?

Your home’s appearance might look the same in another year as it does today, but its value will likely look different. Consider estimates from CoreLogic, a firm specializing in real estate data analytics, which forecast a 2.8 percent increase in home prices by December 2022.

How to boost your home’s value

You don’t have to settle on that estimate after you figure out how much your home is worth right now. Instead, you can take steps to increase that valuation. Here are two ways to do it:

  • Renovate or remodel: If you want your house to be worth more money, consider spending some of your own cash. From adding a deck to finishing your basement, there are some major additions that can make your home stand out and command a higher price. Before you decide to invest a big chunk of money into a project, however, ask a real estate agent what that completed project will actually mean for your home’s value. You can also crunch the numbers and get an estimate yourself with a home improvement calculator.
  • Stage it: Rather than sinking loads of money into a permanent upgrade, you could simply make it look more move-in ready. You could hire an interior designer to help arrange the furniture to give your home a front-of-the magazine style or a professional home stager to help rent furniture and make an even bigger splash. Bottom line: If you can give your home a little bit of extra love, it could translate to a buyer giving you a little bit of extra cash.
Written by
David McMillin
Contributing writer
David McMillin is a contributing writer for Bankrate and covers topics like credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.
Edited by
Mortgage editor