If you’ve been thinking about selling your home, there are many decisions you’ll need to make. Choosing the right listing price is one of the most important. To do this, you’ll need to understand the current market conditions and the value of your home.
Luckily, finding this information isn’t as complicated as you might think. Start with these five tips.
Use Free Online Valuation Tools
As with most things in life, you can begin your home value research online. There are many free online valuation tools available, and you can find them by simply typing
These tools, which are technically called an
Use the House Price Index Calculator
If you’re still in the early stage of your research but you want more accuracy, take a look at the Federal Housing Financing Agency’s House Price Index (HPI) calculator. This tool uses a
There are some drawbacks, though. The HPI calculator only looks at conforming home mortgages and doesn’t make seasonal or inflation adjustments. Still, it’s a simple way to see how much your home may have appreciated over time.
Request a Comparative Market Analysis
When you’re ready to take a deeper dive, it’s time to reach out to a real estate agent and request a comparative market analysis (CMA). While this report isn’t as detailed as a professional appraisal, it will provide you with an expert’s estimate of your home’s value.
Many agents will provide a CMA for free or for a nominal cost. However, be aware that there’s a good chance they’ll do so in the hopes of becoming your selling agent.
Hire a Professional Appraiser
If a buyer wants to purchase your home using borrowed money, the lender will require a professional appraisal. As a seller, it’s sometimes a good idea to hire your own appraiser before you list your home. Not only will this help you set the right asking price, but it will also help ensure you don’t end up with any unpleasant surprises.
Evaluate Comparable Properties
When determining your home’s value, one of the things all of the sources above have in common is that they look at the recent sales of comparable properties (also called
To do a fair evaluation, you’ll need at least three comps. It’s unlikely you’ll find enough homes that are exactly like yours, so you’ll need to make adjustments for differences. For example, if a comp had one more bedroom than yours, it’s likely your home is worth a bit less. Making adjustments correctly requires knowledge of market conditions. This quite difficult if you don’t have industry experience.
Since pricing your home appropriately is so critical to the selling process, we recommend working with an experienced real estate agent who can help you determine your home’s value within a reliable range.