What is your home worth? Ultimately, your home is worth what someone else is willing to pay you for it.
The problem is you won't know that amount until you sell. So, what if you need to estimate the value of your home to determine what you will list it for or to get a sense of how much you can borrow with a home equity loan or home equity line of credit? Here are a few ways you can develop a fairly accurate ballpark figure.
Use Online Tools
One of the most popular sites for estimating home values is Zillow.com. Others include propertyshark.com, and realtor.com. Many real estate agents also offer online tools, including remax.com.
Just keep in mind that some sites use results provided by other sites. If the information you receive from several online value sites seems uncannily similar, it could be due to the fact those sites all pull information from the same database.
You can also see what homes are listing for by checking your real estate agent's site. Some will also show prices for homes recently sold, and in many areas your local government website may list recent transactions including price, square footage, number of bathrooms, the age of the home - everything you need to make apples to apples comparisons. Similarity is important, because comparing similar homes is the best way to accurately estimate your home's value.
Just keep in mind that online tools may only be directionally-accurate, especially in rural areas or in areas where few homes sell on a regular basis. If you live in metropolitan Milwaukee, sites like zillow.com are likely to be fairly accurate; if you live in a smaller rural town, online tools may provide limited value.
Ask an Agent
Experienced real estate agents can quickly ballpark a home's value; they do it every day. A local real estate agent would be more than happy to give you an estimate of the value of your home even if you don't plan to sell right away. If you can, get two or three agents to provide a ballpark figure; compare the results you get to determine an average amount.
And while you're at it, ask the agent(s) to provide comparables. Using comparables is a great way to estimate the value of homes as well as other items. A comparable is a home that recently sold that is very similar to your home: Square footage, age, number of rooms/bathrooms, size of lot, etc. If you provide the agent with the specs for your home, he or she can quickly "pull comparables" for recently sold homes.
Go to Open Houses
Asking others for help is great, but sometimes doing your own Sherlock Holmes impression is useful, too. Open Houses are a great source of information: You can check out comparable homes to your heart's content and get a great sense of how your house compares to others currently for sale.
And while you're there, talk to the agents showing the homes. Agents hold Open Houses for two main purposes: To show the home being listed but also to meet other potential clients. As mentioned, a good agent will be more than happy to share their knowledge with you.
Get a Formal Appraisal
Another option is to pay for a professional appraisal of your home. A home appraisal is the expert determination of value by a certified and licensed professional. Keep in mind that an appraisal is still just an estimate. The appraiser, using a variety of tools and approaches, estimates what the home is worth. An appraisal value is not a guarantee of what the home will sell for.
But it is a widely used and relied upon tool. Mortgage and home equity lenders use appraisals to protect themselves from lending too much on a particular property. After all, you may agree to pay too much for a home; while the home is worth that much to you, it may not be worth that much to other buyers. Lenders will typically only lend up to a certain percentage of the appraisal value even if the home is being purchased for significantly more.
A formal, professional appraisal is the most accurate estimate of home value you can receive. The appraiser will evaluate the specifications and condition of your home, compare your home to comparables, and assess local market trends and conditions. The result is his or her best estimate of the value of your home.
Quick note: Keep in mind, a home appraisal is not the same as a home inspection. A home inspector looks for maintenance, mechanical, and other problems in the home. Appraisers may note obvious problems, but they do not test plumbing, electrical, heating and cooling, and other systems. An appraiser estimates value; an inspector evaluates the condition of a property.