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Understanding how to estimate your home’s value can come in handy. It plays a part in determining everything from your home equity and insurance premiums to annual property taxes. When you’re ready to buy or sell a home, it can also help you settle on a good price. Here are 5 methods you can use to determine your home’s value.
Note: The following tools are subjective and should be used only to give estimates of a home’s value. They do not reflect the appraised value of your home, which can only be determined by a professional appraiser.
Top Takeaways
- Use a House Price Index calculator
- Obtain a comparative market analysis (CMA)
- Evaluate comparable properties
- Try free home value estimators online
- Hire an appraiser
Use a House Price Index calculator
The House Price Index (HPI) calculator from the Federal Housing Finance Agency (FHFA) uses a more research-based approach. This tool references mortgage transactions over time to track how a home’s value has changed from one sale to the next. It then determines your home’s value by estimating how home prices may change in the current market. The FHFA HPI calculator is best used for estimating future mortgage rate changes and tracking the appreciation of your home over time.
Obtain a comparative market analysis (CMA)
If you’ve ever sold a home, you’ve probably seen a comparative market analysis (CMA) before. Real estate agents usually conduct them before listing a home for sale to determine its value. These reports provide an estimated value of your home based on the agent’s evaluation and comparable properties or “comps.” To develop the CMA, real estate agents measure your home against similar properties’ recent list and sale prices in the multiple listing service (MLS). A comparable home is generally one that has a similar:
- Number of bedrooms and bathrooms
- Number of square feet
- Lot size
- Age
- Condition
- Features
- Location, typically in the same or a nearby neighborhood
If you need help finding a local agent you can trust to create a CMA, check out Mr. Cooper’s Agent Assurance. Search and choose your agent from some of the most-trusted brands in real estate. Mr. Cooper’s Agent Assurance helps you feel confident that you are working with the best!
Evaluate comparable properties
Interested in trying your hand at determining your home’s value? Browse websites that include MLS listings, such as Mr. Cooper’s Street Smarts, to find recent sale prices for homes that are comparable to yours. Once you have found a few comparable properties, calculate the average sale price, and that is the estimated value of your home.
Try free home value estimators online
Many of the first results you’ll see when searching for “how to determine your home value” are links to online Automated Valuation Models (AVMs). These calculators use information such as addresses, home features, public records, and comparable home prices to estimate the value of your home. Many lenders also use AVMs before a formal appraisal is done.
Although this is a fast way to estimate your home’s value, AVMs have their pros and cons. AVMs tend to work best in places that have an abundance of current local market data to compare your home to. But, most are programmed to estimate the value for a property even if the available data is limited, according to CoreLogic. In addition, AVMs cannot determine the condition of a property. These assumptions can cause inaccurate estimates of the property.
Hire an appraiser
There is nothing more accurate to determine your home value than a professional appraisal. This method of home valuation is used by lenders to estimate home value and is required to obtain a mortgage. Although professional appraisals “tend to cost between $300 to $500,” according to the National Association of REALTORS® as of 2020, they should deliver the most accurate valuation of the home.
If you’re ready to begin a homebuying or selling journey, Mr. Cooper wants to partner with you! Get in touch with one of our Mortgage Professionals at 833-702-2511 to learn about your loan options or apply online. And check out Mr. Cooper® RightMove. It takes the stress out of buying and selling so you can focus on the good stuff.
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Mr. Cooper ® Agent Assurance Terms and Conditions
The Mr. Cooper® Agent Assurance program (“Program”) is offered by Realogy Lead Management Services, Inc. Cashback bonuses are issued by Realogy after closing of the purchase or sale of a property using a Program-introduced real estate agent. Cashback bonuses are available in most, but not all, states. Cashback bonuses are not available in Alaska or Oklahoma. The program is not available for employer-sponsored relocations or transactions in Iowa or outside the United States. In Kansas and Tennessee, Realogy will issue a MasterCard® MAX gift card. In Mississippi, New Jersey, and Oregon, a commission reduction may be available at closing. Cashback bonuses are not available in certain transactions with restricted agent commissions (including many new construction, For Sale by Owner, or For Sale by iBuyer transactions). A Program agent can help identify transactions where the cashback bonus is not available. The amount of the cashback bonus is based on the purchase or sale price of the property. Please check with a Program coordinator for details. Program terms and conditions are subject to change at any time without notice. Additional terms, conditions, and restrictions apply. Real estate commissions are negotiable between agent and consumer.
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