Most of us have been curious as to what the value is of our own homes. Especially nowadays, when your home value more than likely has risen quite significantly since the beginning of 2022. You may even have input your homes' information on a "what's my home worth" calculator. Almost a quarter of U.S. homeowners use online home-value calculators to get a preliminary estimate of what their home may be worth. These online tools are called automated valuation models (AVM) . Millenials and Generation X'ers are the major players with the AVMs. However, these tools are rapidly being used by Boomers and others, especially in recent months due to home values increasing. There are a myriad of major players out there when it comes to AVM models, such as Zillow. Your Realtor can provide you with the best tools available that fits your needs.
The first step that one should take after getting the initial AVM calculation is to get a comparative market analysis, or CMA. This will provide various sources to weigh your comparisons to get a comprehensive estimate of the value of your home. In addition, another way provided by the federal government is the FHA House Price Index Calculator. This may be a more advanced option than most and it’s recommended to use this as a staple comparison tool in addition to your other options. There is no right or wrong method to use, however your Realtor will be able to point you in the right direction based off your needs.
AVMs are not always sunshine and rainbows. The one common downside to AVMs is that they often cannot physically look inside the home, The most commonly used option is to hire a professional real estate appraiser to determine the true value of your home, even if you start off using an AVM. More importantly, lenders require an appraisal before they’ll approve a mortgage, if you’re looking to buy. Appraisals are relatively easy to get and Realtors often can help set this up with you.
One of the most overlooked steps that most home buyers omit is searching for comparable homes, commonly referred to as “comps” in the real estate industry. These will give you an idea of the value of similar properties in your area to help determine the value of your home. Most home buyers should obtain at least three comps for each property they are looking into. This will help best determine the closest value of what you should bid for the property. Reach out to your Realtor today to discuss your new home buying journey today!
Posted by Andree Huffine, Sarasota Realtor on