Ready to sell your home but asking “how much is my home worth?” The value of your home is an important part of the equation when estimating how much buyers are willing to pay for any given property — and that information can help them make better decisions when choosing if it’s the right decision to list your home for sale on the market.
So what’s involved in determining how much is my home worth? You may be surprised that you don’t need to rely on realtors and the realtor professionals who are members of the Canadian Real Estate Association CREA.
Here’s everything you need to know about appraising your house and understanding its market value:
Know the difference between appraised value and market value.
Appraised value is the amount that a bank would give you for your house. It’s the amount that they would loan against when approving a mortgage.
Market value is what a buyer thinks your home is worth. It’s what you could sell your home for on the open market. The difference between these two numbers can be substantial, especially if your house needs work or has recently undergone some major renovations.
A home value estimator will base their opinion on what they see in front of them: how well cared for the property is, how up-to-date its systems are and so on. If there are any problems with the property, it will affect the valuation significantly.
Appraise your house before selling it.
If you’re planning to sell your home, it’s important to have some sort of appraisal. An appraisal is an unbiased opinion of a property’s value without involving emotions or unrealistic hopes. A full appraisal will evaluate all aspects of the home and its neighbourhood; whereas, a market analysis focuses only on recent sales and listings nearby.
Appraisals are not opinions or guesses—they are based on facts such as square footage, number of rooms, lot size and property type. Appraisers will also consider recent sales prices in your area. While an appraisal may give you an idea of what buyers are willing to pay for your home in today’s market, it won’t guarantee that this price will be reached during negotiations with potential buyers or even at closing time when the sale becomes final.
Study similar homes sold in the past three months.
To determine the market value of your home, and answer your question, “how much is my home worth?”, we start by looking at comparable homes sold within the last three months. What exactly does this mean?
A “comparable” home is one that’s similar in location and/or size to yours. To find these properties, we consult online databases like the MLS multiple listing service for listings in your area that fall into the same general category as yours (e.g., single-family homes vs townhouses).
Next, we look at recent sales data for those properties—not only to see what they sold for but also for any other information about them that might help determine their value relative to yours. For example:
- How much did it cost to purchase the property?
- Which features were included in the sale price?
- What was the condition of the home at the time of the sale?
Your home’s market value depends on many factors.
It’s important to understand that the value of your home is an approximate figure. When it comes to determining what your house is worth, there are a few factors that can play into the equation:
- What the neighbourhood is like
- Whether it’s located in a good school district
- If its near public transportation
- How many bedrooms and bathrooms it has
- The condition of your home
- What potential your home has for improved value
As you’re doing this comparison process be sure not to ignore any necessary repairs or upgrades that might need attention before putting your house on the market; these things can add thousands of dollars to its resale value but at what cost and inconvenience?
Consider selling your home for cash.
One of the best ways to get a quick sale on your house is to sell it for cash. When you sell your home for cash, you don’t have to worry about any of the following:
- Maintenance costs.
- Repair or upgrade costs.
- Cleaning or staging fees.
- Showings.
- Real estate agent fees.
- Carrying costs until closing.
Cash home buyers offer free, no-obligation appraisals. They evaluate the condition of your home compared to others on the market or recently sold in addition to the potential it has. Then they can make you a cash offer right on the spot!
Why should you call a cash buyer for an appraisal first?
Most would agree It’s important to have an idea of what your house is worth so you have realistic expectations of the potential selling price. Or to get a better idea of what improvements you need to make to sell it for the price you hope to get.
While market evaluations are one of the services provided by a real estate agent, you have more options than that. You could call a real estate agent. They will provide you with an estimate of the current market value of your home.
But they will also want you to commit to them as the seller’s agent in the transaction resulting in commission costs. In addition to their fees, you will need to spend money preparing it to list and suffer the inconvenience of showings and negotiations.
A homeowner should also consider whether they want to sell their house fast and cash in on their equity now or wait until they find the perfect buyer for their home who will potentially pay them more. This comes at an additional cost too. You will need to pay carrying costs like mortgage, insurance, and maintenance while you wait.
So the answer to your question, “How much is my home worth?” depends…
First, you must understand the difference between your home’s appraised value and its market value. For a realistic estimate of its market value, you need to compare your home with others comparable in size and condition. Weigh the cost of bringing your home up to the same standards as homes selling for the price you hope to get with what you will need to invest.
This doesn’t have to be overwhelming or stressful. We offer great advice for free, without obligation. Learn the value of comparables, what your home is worth in its current condition and a realistic estimate of what it would cost to sell for top dollar.
