How Much Is My Home Worth? [The Ultimate Guide]

How Much Is My Home Worth? [The Ultimate Guide]

by | Aug 22, 2023 | Blogs and Tips

You’ve worked really hard to turn your house into your home, and chances are it’s your most valuable asset. But how do you determine its actual value?

Checking your home’s value isn’t as easy as quickly checking a random stock price, right? It takes a little bit more time, knowledge, and finesse.

Your home makes up a large chunk of your net worth, not to mention it’s a really big deal. You know, I’ve heard that half of Americans actually cry when selling their home, and those may be tears of joy, tears of sadness, or, frankly, tears of stress. You know, I get it because your home is probably one of the most valuable things that you own.

Today we’ll dive into the different types of home value, the different factors that affects your home’s value, and different market conditions you want to pay attention to as well. We’ll also discuss the online home value estimators and much, much more. Our goal is to lay out a roadmap for you to help you determine your home’s value!

1. Types of Home Values

2. How to Determine Your Homes   Value

3. Home Value Estimator 

4. Reach Out to a Professional Realtor

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1. Types of Home Values 

First off, there’s a few different types of values that we can look at. You have the fair market value, you have the appraised value of your property, and the as is value, or the value an investor would give you for your property.

 

Fair Market Value 

Fair market value is what your home would sell for on the open market, giving every buyer a potential to bid on your home. So you can find the buyer willing to pay you the most amount of money.

But in layman’s terms, the fair market value is what the buyer and seller agree the home is worth and agree to sell the home for. This would be done by having a professional Realtor perform a comparative market analysis and an absorption rate. Statistical analysis is the best way to really determine your fair market value for your home.

How Much Is My Home Worth? [The Ultimate Guide]

Your Home Apprasial

 Your appraised value is how much your mortgage lender determines your home’s value to be at. They come to this value by hiring a licensed appraiser appraise your home. The appraiser will actually take a look at your home, take into account the square feet, bedrooms, bathrooms, the location, the updates you have compared to other properties in the area. They put this in an analysis and put it in an appraisal report to help lenders determine your home’s value.

You’ll usually run into this scenario if you’re selling your home on the open market and the buyer that’s buying your home is planning to finance the property. The lender wants an appraiser to give their opinion on the value to make sure they’re not lending $1,000,000 on a home that’s worth $200,000. You will also find this when you are refinancing the property. A lot of the times, the lender will hire an appraiser to go appraise the value and to get a true estimate of your home’s equity.  

How Much Is My Home Worth? [The Ultimate Guide]

As-is Value | Investor’s cash offer

If you’re considering selling to an investor, your home usually needs some work, and the homeowner doesn’t want to do the work. Your home may not be quite move and ready now, so you just want to sell it and be done with the property.

A lot of times, you’re not going to get the most amount of money for the home, but you may be able to avoid some costly repairs that you may need to do to get that fair market value. Investors usually pay anywhere between 60-80% of fair market value for the home.  Are you interested in learning more about the different types of investors? Click Here to view the blog where we dive deep in the different types of cash offers. 

How Much Is My Home Worth? [The Ultimate Guide]

2. How to Determine Your Homes Value

So now that we know the three different types of home values, we’ll go through the steps that you need to take so you know your home’s value. Step number one, you want to make sure you learn the facts about your home in particular, and also the facts about your local housing market.

1. Learn the facts about your home

Believe it or not, your home’s value is not based on what you purchased it for or how great you think your home is. In a nutshell, your home’s value is basically what buyers are willing to pay you for it. So it may be worth a lot more than what you paid for it, or it may be worth a little bit less.

It really comes down to the condition of your home, the features of your home, and the overall market conditions. Here are some of the main factors you’ll want to consider when you’re really trying to determine your home’s value.

          • Location: One of the biggest factors is location, right? Location, location, location. We all know it. Everybody says it. So, is your home located in a good part of town? Is it close to a lot of shops, restaurants, dining? Can you walk to certain places from your home? Is there a certain aspect of your location that adds value or makes your home less desirable? Is your home waterfront? Does it have a golf course view? Are you on a busy road? A lot of these questions will affect your homes value. 
          • Curb Appeal: Does your home really have that wow factor? When buyers pull up, will they be instantly impressed with your home? 
          • Size: You want to pay attention to your homes square feet. How many bedrooms & bathrooms do you have? How big is it compared to some of the other recent sales in the area? 
          • Layout: Do you have an open concept? Is your home a little more congested and closed off? 
          • Stories: How many stories does your home have? The most expensive thing on any home is the roof and the foundation, so it’s cheaper to build up than it is to build out. What this means is when you’re comparing your home to other homes, pay attention to the amount of stories the home has. If your home is a two story home and has 2,500 square feet and you compare your home to a one story home with 2,500 square feet, it could lead to an incorrect valuation. The one story home is much more expensive to build than your two story home is. 
          • Updates/Renovations:  Buyer’s preferences always change, does your home possess the most modern and desired updates? Do you have granite countertops, quartz countertops? Do you have nice hardwood floors throughout? Is your home freshly painted? Does your home possess a more modern color palette?
A lot of things like that will really play into your home’s value and there is frankly a ton of different factors that go into your home’s actual value and buyers weigh them all differently. It’s a little more of an art than a science. Are you interested in learning more about the updates that will maximize your homes value? Click here to learn the 5 updates you can do to MAXIMIZE your homes value.

2.  Learn The Factors Affecting Your LOCAL Housing Market 

Let’s delve into the core elements of the Charlotte housing market that influence your home’s value. While some of these factors are beyond your control, being aware of them can help you make informed decisions.

          • Mortgage Rates: Now a mortgage is a huge financial decision and a higher rate means higher monthly payments. Buyers don’t buy for price point, they buy for payment. So if you see higher mortgage rates, that could actually discourage a lot of buyers from purchasing properties.
          • Seasonal Trends: You also want to consider the time of year. There’s definitely a lot of seasonal trends at play. When you look at the real estate market, statistically, most homes go under contract March, April and May. So you’re going to see a lot more activity then. Now if you get towards the end of the year when school is already in session, maybe November, December, you’re going to see fewer buyers in the market at that time. So that’s something you want to make sure you consider.
          • Supply vs Demand: If you’re looking on the market and you see that there’s a lot of homes currently sitting on the market, that means you got a lot of competition. This could make it harder for you to sell your home.  Now, if you don’t see many homes for sale and the homes on the market are selling quickly, that probably means there’s a lot of buyers and there’s not much to choose from. This has pretty much been the market that we’ve been in for the past few years. If this is the case, you can be more competitive with your price and really push the envelope to get top dollar. A really good way to judge supply versus demand in your market is really take a look at that absorption rate statistical analysis that judges the amount of months inventory currently in your area.

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3.  Look at Similar Homes that Have Recently Sold

When determining your homes value, you want to take a look at some of the recent homes that have sold either in your neighborhood or right in your area.  Please note, location is key. There can be BIG differences from neighborhood to neighborhood. The farther away you get from your home, the worse that comparable property is.

When you take a look at the homes that have recently sold, it gives you a good idea about what buyers have proven they’re willing to pay for homes in the past. You can compare those homes to your house to help you determine how you compare to them. 

I know there’s a lot of things to take into account when you’re trying to determine your home’s value, but a quick online search going to some of the national websites out there can help you find some recent solds near you.

Reaching out to a trusted Realtor is a great way to streamline the process and really help you determine your home’s value. Realtors have access to much better data sets and can help find and determine the best comparable properties, to ensure that you can get top dollar for your home.  

Mortgage rates

3.  Home Value Estimator 

Another great place to start is to get a free online home value estimate or get an AVM, which means Automated Value Model. If you put your address in Google, a lot of different websites will pop up such as Zillow and Redfin.

You can go on those websites and it’ll give you a lot of facts about your home like the square feet, beds, baths, what you bought it for, and what the previous owner bought it for. All that data is public record. It’ll also give you a rough estimate of your home’s value. Now, a lot of times that value is pretty inaccurate. If you have any questions about the Zillow’s estimate and how accurate it actually is, we shot a video diving deep into that very question. Feel free to check it out below:

There are a lot of AVMs out there and not all of them are created equal. So there are some that are a lot more accurate than others. So if you do want to make sure you follow your home’s value like a pro, we actually have a very accurate AVM model that we offer to all of our clients, friends and neighbors. You can sign up below: 

Our tool is completely free. It’s just a service to help you stay up to date on your home’s value. It gives you monthly reports, and it’s actually powered by CoreLogic, so you know it has the most up to date information available. It pulls tons of different data and resources like market conditions and recent sales in your area to give you an automated value so you can track it month to month.

Our system can also keep you up to date on your home’s equity position based on the estimated price. It’s a great way to really stay in touch with how much money you’re sitting on your home and also track your net worth.

There’s a lot that you can actually do to utilize your equity to build wealth. And if you have any questions or want to know more about that, I shot a video diving deep into that with my buddy and lender, Adam Kelly. Feel Free to check that video out below: 

Those are things that will help you determine how you fit in the market. This is all really great data and information that you can give to your Realtor. When you meet with your Realtor you will discuss your home selling goals and what’s the optimal price that you want to put your home on the market for.

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4. Reach Out to a Professional Realtor

The most accurate way to determine your home’s value is to reach out to a professional Realtor you trust in your local market. Realtors have access to better databases, and can look at your home’s nitty gritty details and compare to the most accurate recent sales and current listings and frankly, no algorithm can do that.

A good Realtor will personally come out and take a look at your home. They will take into account the landscaping, the condition of your home, the layout, and the upgrades that you have spent time and money putting into your property as well.

They’ll also take a look at the local market conditions to really help you determine the best price range so you can maximize your profit. One thing you definitely do not want to do is you don’t want to overprice your home. You definitely don’t want to underprice your home either. There’s definitely a sweet spot that’ll help you maximize your value without putting you in a bad position to lose money.

The true value of your home is not based on a formula. It’s based on what a buyer is willing to pay for your home. There’s a lot of factors to consider when you’re trying to determine the best price point, and these four steps will be your roadmap and your guide to help you find the optimal price point to make sure your home sells as quickly as possible for as much money as possible, while making the process easy as well.

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Zillow Zestimates: How Accurate Are They?

Zillow Zestimates: How Accurate Are They?

by | May 11, 2023 | Home Ownership Education, Selling My House

In the world of real estate, there’s one topic that consistently ignites a spirited debate among buyers, sellers, and industry professionals alike — the accuracy of Zillow’s Zestimate. Is it trustworthy? Can it be relied upon to determine the true value of your home? Today, we’re going to delve into an unbiased analysis of Zillow’s infamous Zestimate, revealing whether it’s a tool you should be utilizing or not.

Our goal is to take a non biased look at Zillow’s Zestimate and identify if you can use it to accurately estimate your homes value.

Let’s unravel the mystery together, shall we?

Today, we’re going to embark on a two-part journey of discovery. First, we’ll unravel what the Zestimate truly is, and then, we’ll shed some light on the facts often hidden in plain sight. By the end, you’ll have insights you’ve probably never come across before. In this article, we’ll cover:

 

1. What is a Zestimate? 

2. How is a Zestimate Calculated

3. Zestimate’s Accuracy

4. How to Update Your Home’s Information on Zillow.

5. The Role of Zestimates in Today’s Housing Market 

6. What’s Your Home’s True Value?

 

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1. What is a Zestimate?

In simple terms, a Zestimate is Zillow’s estimated market value for a home. Zillow uses a sophisticated algorithm that considers a wide range of information to provide this estimate. The Zestimate is not an appraisal, but it can offer a starting point for understanding a home’s value.

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2. How is a Zestimate Calculated?

Zillow’s Zestimate algorithm uses a proprietary formula, which considers many data points. These can include physical attributes, such as square footage, number of bedrooms, and bathrooms, as well as location-specific elements such as proximity to amenities, neighborhood trends, and local market conditions. It also takes into account historical and current transaction data, like recent sales of similar homes in the same area.

However, it’s important to note that Zestimates don’t account for everything. They don’t consider certain elements, like recent renovations or unique features and interior finishes, as this kind of information might not be available in public records or reported to Zillow.

Obviously, the best way to get an accurate evaluation of your home’s value is to hire an appraiser or chat with an expert real estate agent in your area!

 

3. Zestimate’s Accuracy

Zillow has been transparent about the accuracy of their Zestimates, stating that it has a median error rate of roughly 2-3% for on-market homes. This means that half of the Zestimates are within 2-3% of the selling price, and half are off by more. The accuracy can vary depending on the location and the availability of data in a particular area. To judge Zillow Zestimate’s accuracy levels, there are two different categories of Active, or On-Market listings, and Off-Market listings.

The Active Listings Accuracy section are the homes that are currently listed online. Zillow breaks down the accuracy down by state, but it can be narrowed down to your specific city. Researching Charlotte’s data for homes that were listed online and sold, 78.6% of the time the Zestimate was within 5% of the sales price. 93.8% of the time the Zestimate was within 10% of the sales price.  According to that data, the values are pretty accurate between the Zestimate and the current list price of a home.

Comparing the Off-Market sales data, only 41.44% of the homes sold were within 5% of the Zestimate price. That’s 78% for active listings versus 41% off-market, which is a big difference!  Zillow is much less accurate when it comes to off-market homes than when it comes to active listings. 

Researching homes currently listed for sale in the Charlotte, NC market the Zestimate changes whenever the home is officially listed for sale.  For example, a home is currently on the market listed at $689,000 and the Zestimate is at $702,000, a difference of $13,000.  The Zillow Zestimate appears pretty accurate. When taking a closer look at the home value button on Zillow, it will take you down to a chart that shows a Zestimate chart over time. The Zestimate value shown on the example’s home right before it was listed was $509,000.  When the home was officially listed for sale, the value jumped up to $702,000!  Now, that’s a big difference!

Check out the video for several other examples of Zestimates before and after a home is listed in the active market and how they mimic the actual list price!

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4. How to Update Your Home’s Information on Zillow

The information that Zillow has on your home may be incorrect. There is a way you can update your information on Zillow to get an updated value on your home. Go to Zillow’s website and “Claim Ownership” of your address, verify ownership, and “Update Facts”.  Correcting the number of  bedrooms and bathrooms, square feet of your home, and other features will provide an updated Zestimate.  

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5. The Role of Zestimates in Today’s Housing Market

In today’s digital-driven housing market, Zestimates play a significant role. They offer a quick, easy-to-access estimation of a home’s value. However, Zestimates are a starting point and not a definitive appraisal of a home’s value. They are a helpful tool but should be supplemented with professional appraisal, comprehensive market analysis, and expert real estate advice.

Zestimates are a valuable tool in today’s fast-paced, information-hungry real estate market. They provide homeowners and prospective buyers with an immediate, albeit rough, estimate of a property’s worth. But remember, while they are a good starting point, nothing beats the human touch and local market expertise that a professional realtor can provide.

6. What is Your Home’s true value?

If you’re curious on what your home’s TRUE value is? Want to know how much it could be worth on the market? Sign up for a free home evaluation today! Our expert team will provide you with an accurate and comprehensive report, giving you insight into the current market and helping you make informed decisions about your property. Sign up now and take the first step towards unlocking the TRUE potential of your home!

As your trusted realtor, I’m here to help you make the most of your assets and guide you on this rewarding journey. If you’re ready to explore the possibilities that your home’s equity offers, don’t hesitate to reach out.

Thank you for taking the time to read this article. I’m excited to assist you in unlocking the full potential of your home’s equity and creating a lasting legacy for your family.

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