5 Ways to Find Home Value

First, let me ask. Who or what decides on the market value of your home? Is it the cost to build a home like this? Or is it how much someone paid for this home years ago?

Well, in residential real estate what matters the most is what an able (has the money or access to money) and willing (wants to buy) would pay for this house.

How do you find out how much an able and willing buyer would pay? There are a few ways home buyers and home owners have been using to find home values.

1. County Tax Assessor Records.

Cost: FREE. If you’re a home owner, you will have to pay real estate taxes, which support local schools, fire department etc. How much you pay depends on the value of your home. Regardless of local tax rates, whoever has a more expensive home will pay more. That’s why the county assesses the value of your home every year.

I already explained how to find home values on assessor’s website in Snohomish county. If your home is located elsewhere, google a tax assessor in your county. You need to remember that the assessment is updated once a year. Also, they don’t have to come to physically inspect the building. (Depending on the county, they may have to drive by like once every 5-7 years).

The major goal here is that all homes are assessed with the same approach. (If someone in my neighborhood has the same home/land I would expect us that we pay same amount of tax). This doesn’t always reflect the real market value (what a willing and able buyer would pay).

2. Zillow

Cost: FREE. Zillow is a popular website and doesn’t really need my pitch. What I wanted to mention is they update home values much more often. You can claim your home on Zillow and subscribe for updates. As soon as the value of your home on Zillow change, you’ll get an email notification. The accuracy varies depending on location and type of home. Here’s a discussion on Zillow accuracy.

3. CMA (Comparative Market Analysis)

Cost: FREE HERE. A CMA is what your local real estate agent will do, to price a home correctly. In the first step, your agent will choose comparable homes, or comps. Those are homes similar to yours and located in the same area. Typically, an agent would find a few active homes (are currently up for sale), a few sold homes (in the last few months), and a few expireds (failed to sale; possibly overpriced). By analyzing the comps, you can arrive at a quite accurate assessment of the market value. The accuracy is pretty high, and will depend on how carefully the agent will chose the comps.

4. BPO (Broker Price Opinion)

Cost: $50-$150. BPO, as the name suggests, is a formal real estate broker price opinion usually requested by a third company. When a company wants to know the market value of a property, they hire a real estate agent to do a BPO. Most commonly BPOs are used by banks when they sell foreclosed homes. Depending on a type of BPO (external, enternal etc) an agent would need to just drive by a home or go inside, take pictures etc. They also pull comps and fill out necessary paperwork.

5. Appraisal.

Cost: a few hundred dollars. An appraisal is done by a licensed professional, an appraiser, who assesses homes for living. Most commonly an appraisal is requested by a bank before they give a loan on a property. While an appraisal is the most expensive out of the listed above, some real estate agents argue that an appraisal is not always the most accurate home value assessment (this largely depends on the appraiser’s expertize in a specific geographic area). However, if you are taking a loan, the bank will set all their requirements based on the appraised value.

Picture credit: Chris Harvey, Photoxpress.com