It’s important for homeowners to always have a good idea of their property’s value, even when they’re not planning on moving any time soon. As with any major investment, asking the important question: “how much is my house worth?” and following up with regular checks on how the value is changing (or not changing) is a critical part of ensuring long-term financial health. And thankfully, there are a number of easy—and usually free—ways to check in and receive an up-to-date analysis of a home’s current market value.
There are multiple of reasons to keep a close eye on what your home is worth, including and aside from possibly wanting to sell it soon. For starters, your home is part of your net worth, which is itself a good indicator of your current financial well-being. And because you never know when you might want to take out a home equity line of credit, it’s good to always have a general idea of what you could borrow against.
Of course, “how much is my house worth?” is, ultimately, about knowing how much you can get for it if you decide to sell. Many real estate professionals recommend keeping tabs on your property’s value in the two or three years leading up to when you want to list it so that you can track any key trends and, if feasible, take advantage of an upswing if it presents itself.
So how do you figure out how much a home is worth? Here are four ways.
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Use an automated home value estimate tool
Probably the easiest way to receive an estimate on the value of your home is to enter your information into Realtor.com’s home value tool. Just type in your address and you’ll receive a free estimate on the current price, as well as a comparison of how your home’s value compares to the median prices of homes both listed and sold in your neighborhood. You’ll also get a clear visual of the general market trend for your town.
As a bonus, if your home’s estimated value raises more questions than answers for you, or if you just want to dig deeper into nearby market trends, you can easily request a free analysis from local agents right on the same page.
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Ask a real estate agent
Nobody has a better handle on your local market than the real estate agents who help people buy and sell homes there. And fortunately, most agents will be happy to help you figure out your home’s estimated worth for free or no cost in the hopes that when you are ready to sell they’ll be the first ones you call.
When choosing an agent for the job, look for the same things you’d look for if you were searching out someone to sell your home for you. Ask around for recommendations from trusted friends and family members, read online reviews, and find someone who you click with. The agent will use public records to determine your home’s value, primarily data on recent home sales in your area. They’ll also be able to factor in things about your home that may have an effect on its value, like high-demand features and improvements.
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Do your own comp analysis
You don’t have to be a licensed agent to access the information that helps determine a home’s estimated worth. “Comps,” which is short for comparables, refers to the value of similar properties in your neighborhood—figures that help inform what your own home is worth. The best comps come from properties that are in the same location (think narrowly; not just your town but the specific area of it that you live in) and that have similar square footage and features.
When it comes to a comp analysis, actual sale prices are much more telling than list prices, since they speak more to a property’s real value. Browse your local MLS page or head back to Realtor.com’s home estimate tool and start plugging in addresses. If a home has recently sold, you’ll see the price it sold for and when the sale took place. Otherwise, you’ll see an estimate of the home’s current value.
For the most thorough comp analysis possible, you’ll also need to factor in additional information about your home that will affect its worth. Things like updates, upgrades, and a finished basement will all have an impact on what its market value might be. It’s difficult to determine the exact value of these factors without the help of an agent, but figure you’ll get a boost for upgrades like stainless steel appliances, extra bedrooms, and that aforementioned finished basement.
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Get an appraisal
Appraisals aren’t limited just to times when you’re selling or refinancing a home. Homeowners are free to hire a professional appraiser to come in and give them an estimate of their property’s value whenever they’d like, though keep in mind that this is a service you’ll have to pay for.
An appraiser can offer one of the most comprehensive price estimates possible because they consider a wide range of value-affecting factors, including comps, interior and exterior property characteristics, and local market trends. They’ll even be able to make key determinations based on less quantifiable factors such as the flow and functionality of your floor plan.
Be sure to only work with an appraiser who is licensed or certified and has experience in your particular market.
The bottom line
How much your house is worth is a combination of both real and perceived variables. No estimate is perfect though—the only value that really matters is the amount you can get from your buyer or the bank. But if you keep on top of your home’s estimated value, as well as the trends dictating your local market, you won’t have to worry about facing sticker shock when the time comes to find out what your property is really valued at.
If you’re ready to sell, start looking at comps and get an online estimate early on in the process. While your real estate agent will help you set the best price for your home, it can be incredibly helpful to do a bit of your own research so you’re not completely out of the loop on how and why your home is being priced as it is.