If you own a home it’s most likely one of your biggest investments which is why it’s important to keep track of its value. The home valuation process used to involve getting in touch with your realtor to obtain a comparative market analysis, or actually ordering an appraisal.
Technology has changed this, somewhat. Just like it did for stocks and other investments, you can now check the value of your investments whenever you want.
Try Our Home Valuation Tool, It’s Fast and Free
Our Home Value Estimator is an easy way to help you estimate the value of your home. It uses public records, comparative market analysis data, and home appraisal data from recent sales of comparable homes to give you a ballpark estimate of your home’s worth. Simply enter your street address to see your home’s value.
If you would like a more detailed analysis, one of our real estate experts is happy to provide you with a Competitive Market Analysis. Simply provide us with some basic information, and someone will reach out with your analysis.
All About AVM
An automated valuation model or AVM uses specialized algorithms to look at the available data about sales of similar properties in a neighborhood in order to come up with their price. Valuation models are a great place to start, as a matter of fact, this is where almost all of the valuation methods start.
The problem with algorithms is that they only look at certain data points, they can’t take intangibles or external factors into consideration, things like special features, upgrades, views, location, charm, and good design.
So relying on the AVM results is just a bad idea, you could be seriously overvaluing, or undervaluing your home’s value.
Another important consideration when looking at valuations Is the purpose of the valuation itself. For example, an assessment valuation would most likely be very different than a market fair market value evaluation.
Let’s take a look at the three different types of valuations
Market value, Your current market value is what a prospective buyer is willing to pay for your home. The best way to approach this number is through something called a Competitive Market Analysis. This is something a realtor can provide for you. Different than an appraisal because the realtor is not necessarily a licensed appraiser.
This is the number you’re looking at when you want to sell or two understand how your home impacts your net worth or your financial plan
Appraisal value: Your home’s appraised value is based on what other nearby homes or similar homes in your neighborhood are worth, as well as any modifications you’ve made to the home. This number is used when considering a new home mortgage or refinancing your current home.
Appraisals can only be done by a licensed appraiser and of course, a home appraisal can cost between $400 to $1,200 dollars per house depending on square footage and location. Home Buyers will most likely need an appraisal as a mortgage lenders requirement.
Assessed value — This is an assigned dollar value used by local county tax assessors to calculate your property tax obligation. This value may be based on the appraised value or the fair market value, as well as any home improvements. While this number can use current market data, the assessed value is usually different from than market value.
There are several different scenarios when you might need to know the value of your home. The most obvious is when it’s time to sell or buy. If you are buying or selling a home, it’s important that you know the true value.
Selling and Buying
An AVM estimate can certainly get you in the ballpark but in order to find the actual value, you will want to have a professional do a detailed analysis. This can be done by either a Realtor in the form of a Competitive Market Analysis or a Licensed Appraiser in the form of a full appraisal.
Eliminating Mortgage Insurance
If you have a loan on your home and have less than 20% equity, you most likely have mortgage insurance. As you pay the loan down, and as the market increases the value of your home, you may be able to eliminate this additional cost.
If you think your home value has increased enough to eliminate mortgage insurance, you should talk to your Realtor or Lender about the process of eliminating this additional cost.
There are several options available when it comes to refinancing your home. The first option is a cash-out refinance. A cash-out refi is a mortgage refinance in which the borrower receives cash instead of a new loan.
This type of refinancing can be helpful if the borrower needs money quickly and has good credit. The downside is that the interest rate on a cash-out refi may be higher than the rate on a traditional loan, and the refinanced amount may not be as large as the original mortgage.
Refinancing your home may be the best decision for you if you want to save money, build equity, reduce your monthly mortgage payment and pay off your mortgage faster. In order to qualify for refinancing, you will need good credit and a stable income. A home equity loan or line of credit is a great way to get up to 80% of the value of your home transferred into an installment loan. This will help you build equity in your home and pay off your mortgage faster.
A one-half to three-quarters of a percentage point reduction in interest rates can make the refinancing worthwhile. If you plan to stay in your home for at least five years after closing, recouping closing costs is likely.
HELOC-A Home Equity Line of Credit (HELOC) is a type of loan that allows you to borrow money against the value of your home. The loan is typically secured by the equity in your home, which means that you are responsible for repayments even if your home values decrease. HELOCs can be helpful if you need some extra cash flow but don’t want to take on a large debt or if you want to buy a house quickly and don’t have enough money saved up for a down payment.
It is important to know the true replacement cost of your home in order to keep your home owners insurance policy up to date. As property values increase, so does the value of your home. If you don’t know the replacement cost of your home, you may be underinsured in the event of a catastrophic disaster.
The replacement cost of your home is the cost to rebuild it if it were to be destroyed or damaged beyond repair. This figure is based on current market conditions and can change over time. The best way to find out the replacement cost of your home is to contact a local real estate agent or property appraiser. If you are not comfortable doing this, you can also use an insurance quote tool to get an estimate.?
Knowing the replacement cost of your home will help keep you up-to-date on your insurance policy. If you have a high-value home, you may be underinsured if something catastrophic happens and your home is destroyed. Contact a local real estate agent or property appraiser for more information about how to find out the replacement cost of your home.?
It is important to monitor the market value and property tax assessment value of your property in order to avoid paying taxes on an artificially inflated or deflated value. The market value is a figure that reflects the worth of a property as determined by buyers and sellers in the open market. This figure can be affected by many factors, including recent sales prices and trends in the area. The tax assessment value, on the other hand, is a calculation made by the government that takes into account factors such as age, size, and condition of the property.
Because it takes into account these factors, it is usually a more accurate estimate of what your home is really worth. It is important to stay up-to-date on these values so you don’t end up overpaying or underpaying taxes on your home.
First and foremost, it is important to understand that your home’s market value is not static. It can change over time, depending on a variety of factors such as the condition of the home, the neighborhood in which it is located, and recent trends in the local real estate market.
Because estate planning involves anticipating potential financial challenges down the road, it is important to have an accurate idea of your home’s current value. If you are thinking about selling your home, having an appraisal done will give you a more accurate estimate of what your home is worth today.
If you are concerned about whether or not you or a loved one will need care in the future, knowing your home’s value can help make planning easier. By understanding how much money you could potentially need to spend on care and by having an estimate of how much money your home is worth today, you can create a budget for future needs.
If you would like one of our real estate experts to prepare a market analysis of your home, please contact us. We are happy to help.