We'll show you some free house valuation tools in a moment. First, it's important for you to understand what factors contribute to a home's value.
A given home's value depends primarily on three major factors:
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- the physical characteristics of the property (land, structure, and location),
- the local economy, and
- the economic supply and demand for homes in the given property's neighborhood.
Local Economy: Communities with healthy economies, low unemployment, and faster growth than the national average tend to see increased consumer confidence that pushes up home prices in the shorter-term.
Supply & Demand in the Neighborhood: Finally, the number of houses for sale in your neighborhood at the time you wish to sell your home plays a big role on the price a buyer will be willing to pay for your home. Most homeowners notice when homes are listed for sale in their respective neighborhoods. Based on your understanding of your neighborhood, are there more or less homes for sale than usual? Of those homes for sale, the more that are similar to your home in size and features, the more pressure you will see to drive down home prices.
Use free online house value tools
The "Heat Map" feature on www.trulia.com is an interesting tool that can help in estimating how home values in your neighborhood compare with the overall real estate market in your city. These "Heat Maps" break down neighborhoods within a given metropolitan area. Then, based on property listing & sales activity associated with real estate brokers who have placed their listings on the Trulia site, they calculate the neighborhood listing and pricing statistics. One word of caution: Trulia's data for homes currently for sale is often a small sample of the overall market, as they get data only from those real estate brokers who take extra time to give it to them. So while Trulia's home price trend data may offer some insight regarding real estate activity in a given neighborhood, it is not representative of all the listings or sales activity in a given market.Once you take these primary home values and market timing indicators into consideration, you are then ready to estimate your home's "range of value" at a given time.
First, take advantage of Internet websites that offer free home "automated valuation models (AVMs)". While these are the least accurate estimates of house value because they are computer-generated, they are based on public records data about recently sold properties and they are free. By going to several sites such as www.zillow.com, www.realestateabc.com, or www.reply.com, you can get several computer-generated estimates that can help you establish a range of value from which you can evaluate your options on how to set the price for your home. HomePoint.com also offers a free house value report.
Get a professional home value estimate - a Comparative Market Analysis (CMA)
The next best approach to establishing the current market value of your home can also be free, but it involves contacting a local neighborhood real estate professional for what is called a "comparative market analysis" (CMA). Most real estate professionals will provide a CMA for free when contacted by a homeowner in hope of having a chance to compete for the property listing should you decide to sell and wish to use a REALTOR®. A CMA is often more reliable than an AVM because a local real estate professional reviews the most recent neighborhood sales and has access to proprietary "Multiple Listing Service" (MLS) data that is not available to the general public. A real estate professional considers what properties are currently for sale in the area, makes value judgments regarding the quality and condition of your property relative to the competition, and has insight and knowledge regarding historic real estate activity in your neighborhood. Bear in mind that the free CMA could overstate your home's value, as the real estate agent is trying to "please you" and convince you to list your home with them. The agent *may* inflate that value to make you think that you will get the best home price if you use that agent.Should you obtain a CMA from a local REALTOR® and choose not to list your property, or try to sell it yourself, you may wind up on that REALTOR'S® mailing list and be sent sports schedules, calendars, recipes, and magnets!
With that said, you might consider retaining a real estate consultant on an hourly fee basis to assist you in generating an objective CMA - because it is less likely to be influenced by a given agent's desire to "list" your property. For more information on real estate consulting, find out more about the "Accredited Consultant in Real Estate" (ACRE™) designation, including contact information for the ACRE™-member agent nearest you.
Get a real estate appraisal
Finally, a real estate appraisal from a licensed appraiser is likely to be the most reliable estimate of your home's value, and can usually be obtained for approximately $350 for most properties.
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