How to Determine the Resale Value of a Home
Published on 7 December 2023 in Blog by
Last updated on December 20th, 2023 at 02:17 pmDo you know how to determine the resale value of a home? If the answer is no, you’re certainly not alone. Whether you’re simply curious or want to use this information to guide your financial decisions, knowing your home value is important. This guide will show you everything you need to know about learning your home’s resale value:
Why Should I Know My Home’s Resale Value?Knowing how much your home is worth is essential, even if you don’t plan on selling immediately. If your home has gained value, this means you’ve also acquired more equity, which could be helpful when applying for certain types of loans. Understanding your home value also allows you to determine whether you can sell your home and buy a more expensive one for the same mortgage payment. This is possible when you’ve built enough equity in your current home.
Factors That Determine Resale ValueFor those who don’t know how to determine the resale value of a home, the number of factors contributing to a valuation can be confusing and difficult to follow. Some things that can increase or decrease the value of your home are within your control, while other factors aren’t. For example, any upgrades you make to your home may increase its value, but recent sales in your neighbourhood, crime statistics, and the local school systems are factors out of your control that could significantly help or hurt the value.
How To Value Your HomeMost people turn to a professional to get an estimate of their home’s value. There are various methods for performing a valuation.
Comparative Market AnalysisThe best place to get a market evaluation is from a real estate professional. Your real estate agent or realtor can look at how similar homes in your area are selling and make an estimate based on square footage, location, appliances, and other features your home has in common with others that have sold recently. This analysis also takes a look at how interest rates and seasonal trends may be impacting your home value.
Appraised ValueYour home’s value can also be determined by a professional appraiser. Lenders require an appraisal before allowing someone to purchase a home so they know how much risk is involved in the mortgage. The appraised value is rarely the same amount that a house actually sells for, but it usually gives you a good ballpark to start from. Lenders will turn buyers away if the appraised value is too far away from the sales price.
Online ToolsIf you scour the internet, you can find online home price calculators that use local records about your own home and those in your neighbourhood to give you an estimation of your home’s value. One of the greatest factors these calculators take into account is the upward or downward trend of home sales in your area and recent tax records. Keep in mind that online self-calculations are usually the least accurate.
What’s NextKnowing your home value can help you with any of the following:
- Determining whether it’s the right time to refinance your mortgage and cash out your equity
- Applying for a home equity line of credit
- Deciding whether it’s a good time to sell your home and upgrade to a new one
- Figuring out what things you can do to your home to increase your equity