You’ve probably done a Google search for “what is my home worth?” or “home value calculator.” According to Forbes, 22% of U.S. homeowners who determined their home’s value used an online estimator. Millennials are the big culprit of utilizing these automated valuation models (AVM) . You can find these on any big lending/bank website, or on sites like Zillow, Redfin or Trulia.
A very important step for when you’ve done your initial AVM calculation is to get a comparative market analysis, or CMA. This will give you various sources to weigh your comparisons to get a comprehensive estimate of the value of your home.
One option provided by the federal government is the FHA House Price Index Calculator. It is a more scientific and calculated approach than AVM. It’s recommended to use this as a staple comparison tool in addition to your other options.
However, the classic coveted way to get a true estimate of your home is to hire a professional appraiser. Many people still consider this the most concrete and comprehensive approach to getting the true estimate of your home, as some AVMs cannot get a true look inside the home. More importantly, lenders require an appraisal before they’ll approve a mortgage, if you’re looking to buy. Of course, as a home owner, you can get an appraisal at any point in time. Almost a third of home owners in America used an appraiser to determine the value of their home according to Forbes.com.
Lastly, do not forget to look at comparable properties. Often, these are referred to as “comps” in the real estate industry. Comps give you an idea of the value of relatable properties in your area to help determine the value of your home. Usually three or so is a good yardstick to go by for comps.