Knowing your home’s current value can be beneficial for a number of reasons. Whether you’re thinking about putting your home on the market, or you’re interested in refinancing, having a good idea of what your home is worth will help you decide the best course of action and help you achieve your goals.
If you’re thinking of taking advantage of the recent seller’s market that seems to be sweeping across the U.S., then finding the market value of your home is one of the first things you’ll need to do. If you’re working with a real estate agent, he or she can help you determine your home’s worth by examining the public data associated with the home. They will also use what they call “comps” to compare what your home is worth against what similar homes in your area are selling for.
If you’re thinking of taking advantage of a lower mortgage rate by refinancing, then knowing the value of your home is important because it will determine how much equity you have in your home. Equity is the amount of your home that you own. It’s calculated by subtracting what you owe from the current value. If you owe less than what your home is worth, then your equity equals the difference. If you owe more on your mortgage than the home is worth, then you have what is callednegative equity. Another term for this situation is being “underwater” in your mortgage. If you have negative equity, it can be very difficult to refinance.
Refinancing often requires the homeowners to have an official appraisal conducted on their home, so that the lender can see what the property is worth. Hiring an appraiser will give you an exact amount, whereas looking up data online will only give you an estimate. However, getting an appraisal done can be expensive, and if you’re just curious about your home’s worth and aren’t sure if you want to sell or refinance, then using one of the following sites may be a better idea:
- Zillow.com’s “Zestimate”: http://www.zillow.com/wikipages/What-is-a-Zestimate/
Zillow’s “Zestimate” is an estimate of a property’s current value based on public data and user submitted information. It is not an official appraisal; however, it can be used as a starting point when deciding whether or not you’re ready to sell your home or refinance. Home buyers can use this information as well, since it may help in deciding whether or not to purchase the property. To get a Zestimate for a specific property, simply visit Zillow.com and enter the property’s address. You will see the property’s Zestimate, along with other data such as past sales figures and change in value over time.
- RealEstate.com’s Home Value Estimator: http://www.realestate.com/homevalues/
To use this site’s home value estimation feature, simply click the link above and enter the property’s address. Like with Zillow, the estimated value will be listed along with data such as lot size, home size, age of home and comparable sales.
If you decide to hire a professional home appraiser, then you should check out our related post, “Exploring Different Types of Real Estate Appraisals.”
Courtesy of American Financial Resources, Inc.