Some homeowners still grapple with the idea of how much their house is worth unless they’re a professional realtor or they do some real estate investments. For some of them, the latest price they know about their home is the price when they bought it, which could be a couple of years ago. You would even often hear homeowners say that they heard some of the houses in their block were sold for this much or that much.
What they’re trying to say or do is that they believe their homes should sell for just about the same price as those of their neighbors who sold and left. There’s some basis to what they’re saying but there are some rules and techniques on how these valuation methods are done. For one, you can price your home pegged against the value of homes recently sold in your neighborhood, as long as these are comparable properties.
Here are some of the ways to find out how much your house is worth.
Comparative Market Analysis (CMA)
The Comparative Market Analysis (CMA) is the valuation of property method that comes closest to an expert appraisal done by a real estate appraiser. Doing the CMA will require extensive and in-depth research for information that other valuation methods don’t normally dig into.
To do the CMA, the person doing the research has to pull up listings of properties that are considered comparable. The term ‘comparable’ or ‘comps’ refer to properties that have features and characteristics that are similar to your home or property. Typically, the features compared to check for similarities are the following:
- Number of bedrooms and bathrooms
- Total land area and total floor area: in terms of square footage
- Year when the home was built and renovations are done, if any.
- Other structural features such as water tank, driveway, etc.
The CMA is typically prepared by realtors and real estate agents, but you can do it yourself if you feel up to it. Real estate agents are trained in how to estimate the value of a home’s features, including improvements and upgrades. This gives them the ability to come up with a price estimate that’s close to the current fair market value (FMV) of your home.
Most Recent Sale Valuation
Another valuation method to know the price of your home is called the most recent sale valuation method. This involves comparatively less research than doing the CMA. Unlike the CMA, you don’t have to pull up comparative listings.
In this valuation method, you’ll have to find out the final close or sale price of properties in your neighborhood. It can’t be just any other property. You should find out the property most recently sold in your neighborhood which closely resembles the features and attributes of your home or property.
Keep in mind that the property that was most recently sold should be comparable to your home or property. For example, if your home has 3 bedrooms, you should look for a comparable property that was recently sold with similar features and characteristics as possible.
In looking for properties in your neighborhood or immediate vicinity which were recently sold, it doesn’t follow that the homes across the street from your home don’t necessarily always fall within the ‘same neighborhood’ as your home. The reason for this is that the houses across the street may belong to a different economic category or land-use zone from the point of view of professional appraisal.
Not a lot of people know but this is the valuation method used by many banks and financing institutions because this is also the traditional basis for the valuation techniques used by professional real estate appraisers.
Online Calculators and Listing Estimates
A third valuation method that is gaining more popularity is the use of online valuation calculators and listing estimates. There are real estate websites that would allow you to calculate the value of your home. You just have to input the address of your home, as well as its features and characteristics such as land area, floor area, year built, number of rooms, etc.
There are also online listing sites that have their own built-in estimate. You don’t have to do any computation. You just type the complete address of your home and it’ll direct you to your home’s listing page. The listing will typically contain an estimated price of your home. It would also typically show an estimated range of price offers that your home will most likely receive from prospective buyers.
Check Appraised Values in Tax Office
Another valuation method would be to check for the appraised values and gross estimate values of comparable properties in your neighborhood. There are several ways to do this. If you can have access to appraisal reports submitted to banks and financing institutions, you’d be able to get a range of the appraisal values of comps in your neighborhood for homes like yours.
You can also do this by going to your county or state tax office. Most county tax offices keep records of the sales transactions made within their county. Keep in mind that every sale transaction of real estate requires either the buyer or the seller to pay capital gains tax, transfer taxes, and other fees. The county tax office usually keeps records of these sales transactions as well as the taxes paid on them. These records would sometimes indicate the appraised values of the properties.
Some research outfits gather data from state or county tax offices to collect information on the various final taxes and transfer taxes paid out when the sale was closed. Their records are quite extensive and comprehensive, covering a lot of information relating to the properties. The information typically includes the final sale price, real property taxes currently owing, and taxes paid.
Conclusion
There are multiple ways to get an estimate of the value or market prices of your home. Most of them would involve a bit of research although in different ways. Some would require you to check on the prices of comparable listings of homes in your neighborhood. Another technique is to check the final sale price of the properties which were most recently sold in your area. But this would take a little bit more research work since some sellers and buyers don’t publicize the final sale price of the deals they close.
