How Much is Your House Worth? How to Calculate Your Property Value
There’s a lot of reasons why someone would be ready to sell their home. Perhaps you’re looking for a larger space away from the city or you just can’t afford the rising property taxes anymore. Whatever your reason is, one thing is for sure: it’s time to sell your house.
Once you come to that decision, where do you start the process? A great first step is to calculate your property value and find out how much your house is worth. This way, you get a good idea of how much you can afford for your next place. You can get a basic idea of your home’s value by doing the research and crunching the numbers yourself.
Do Your Research
The first step to calculating the estimated value of your home is to understand where the housing market is at. Seattle’s housing market is changing on a daily basis. One day, your house could be worth $410,000 and just a week later it could be worth $415,000. Because it’s difficult to predict the future, the best way to stay on top of the trends is to subscribe to blogs and news outlets that share their research on the subject.
Once you have a basic understanding of where the market is going, it’s time to start looking at houses. Pretend as if you were going to buy a home in your neighborhood. Log into your favorite home search site and take a look at what homes are currently listed for in your area. Then, take a look at homes that have recently sold. We’ll get more into comparing your homes to others in a bit.
While you’re doing your research, pay particular attention to:
- What the median home price is in the county/city you’re located in (according to Geekwire, it was $820K in Seattle in April 2018)
- What kind of homes are in the market in your area
- How old most of the homes are in your area
- Speculation on future market trends
- Future changes/demand for housing in your neighborhood
- Average price per square foot in your neighborhood
These are just a few of the aspects that will have a major influence on how much your house is worth. However, this will give you a solid foundation of knowledge to help base your estimated home value on.
Compare Your House
As we mentioned previously, one of the major steps in conducting research and finding out what your house is worth is comparing your house against others in your neighborhood. Not only is this a good way to gain an understanding of the market, but you’ll also have a good idea of what your house could sell for.
Log into your favorite home search site (Zillow, Trulia, UrbanRePartners) and type in your zip code. In your filters, put in a price range that you expect your house to sell for. For example, if your home was built in 1970 and hasn’t been maintained very well, you might want to look at prices ranging from $350,000 to $800,000.
Start looking through the homes and pick out 3-5 that are similar to your house. While doing this, ask yourself:
- Does it have a similar number of bedrooms and bathrooms as mine?
- When was it built?
- How does the quality of the interior and exterior look?
- What amenities are included with theirs that aren’t included in mine (and vise versa)?
- What is the square footage?
- Is it the same style of home (townhome versus single-family)?
- How is the parking/view?
If you can’t find homes exactly like yours, that’s OK. Just pick a few that are close enough.
Narrow Down Your Search
Now that you have your 3-5 homes picked out, it’s time to dive deeper. Take out a piece of paper and write down the answers to the questions mentioned above. For every element that your comparison home has that’s better than yours (i.e. 10 years newer, higher square footage), subtract the value of that from the listing price of the comparable home to make up the difference. For every element that your house has that’s better than the comparison home, add that value to your estimate.
If you’re not sure the value of certain elements, such as an extra bathroom, then you might want to do some more research. Take a look at two very identical homes online and compare the prices to the amenities included. It’s worth noting that this isn’t the most reliable way to do it, and talking to a real estate agent will give you a better understanding of current home values.
Once you have your comparison home prices figured out, add them all up and divide them by the number of homes you’re comparing. For example, if you have three homes each priced at $425K, $455K, and $475K, you would add them up to get $1355K and then divide by 3 to get $451K, or the average. This would end up being your estimated house value.
Getting a More Reliable Answer
If you’re thinking, “this doesn’t sound very reliable,” then, well, we’re here to tell you that it’s not. As a homeowner, you’re limited in the number of resources you have to calculate the value of your home by yourself. You may end up with $451K where an appraiser may come up with a value of $398K.
The best way to figure out what your house is worth is to work with a professional. If you’re thinking about selling traditionally, a real estate agent will be able to walk you through the process and help you price your home accordingly. However, if you don’t want to worry about paying commission fees, having a long close, or dealing with inspections and repairs, you might want to skip working with an agent altogether.
Instead, you can request an offer from a local real estate investment company. We’ll do the work for you to calculate the price we would pay for your house based on the number of repairs needed and the value of the property it’s sitting on. You’ll get that offer delivered within 24-48 hours of your request and, if it sounds good to you, we can close the sale and pay you for the house as soon as you’d like. This way, you can take the cash and use it to move on to the next stage of your life.
There’s no obligation – why not save yourself a headache and request an offer on your house?