Provide some basic information and we'll prepare a Comparative Market Analysis (CMA) for your home.
A home valuation gives you valuable knowledge that can help you make smart decisions as well as plan for the future. It’s good practice to stay informed about how much equity you have in your home and how much you may be able to borrow against it or sell it for.
For the most precise home valuation, reach out to discuss a customized Comparative Market Analysis (CMA) or an appraisal.
A home valuation is the process of estimating a property's worth, which can include its appraised value by a professional, its assessed value for property taxes, or its current market value, which is what a willing buyer would pay. This process considers many factors like location, size, condition, recent sales of comparable properties, and current market trends.
Your home's valuation is primarily determined by a CMA, which compares your property to recently sold homes in your area. Key factors include location, size, age, condition, and features, as well as local market conditions, such as interest rates and the balance between buyers and sellers.
Professional appraisals, used by lenders, also assess these elements to determine the home's current market value.
Online valuations (e.g. Zillow) provide reasonably accurate valuations and are a good starting point. They can be less accurate for recently renovated or unique homes, as the data may be outdated or incomplete, and they can't account for a property's current condition or "x-factor".
A professional appraisal is generally more accurate than online valuations because they account for the home's condition, upgrades, and other physical factors.
The CMA is considered the most accurate method for determining the current market value of a home, especially when preparing to sell.
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Two Accurate Ways To Perform A Home Valuation
MARKET ANALYSIS
A Comparative Market Anaplysis (CMA) is a tool used by real estate agents to determine the current market value of a home. It evaluates similar homes that have recently sold in the same area. Agents find comparable sales and use them to conduct a sales comparison. In most cases, an agent will find at least three homes that have recently sold and are as similar to and located as close to the home being valued as possible. Each one is then analyzed to pinpoint differences between it and the home being valued. Once these differences are priced out, the price of each comp is adjusted to see what it would cost if it was identical to the home being valued were it to be sold in the current market.
APPRAISALS
An appraisal is an unbiased valuation of a home based on a professional’s opinion. They are usually what mortgage companies use for home purchases and refinances. A lender usually orders a home appraisal and the cost of the appraisal, sometimes up to $500, is paid by the homeowner. An appraiser does a complete visual inspection of the interior and exterior of the home as well as taking into consideration recent sales of similar properties and market trends. The appraiser then compiles a detailed report on the home, including an exterior building sketch, a street map showing the home and any comparable sales, photos of the home and street, an explanation of how the square footage was calculated, and any other relevant information.
Situations When A Home Valuation May Be Necessary
REFINANCING
Lenders base the amount of their loans on the value of your property and usually allow you to borrow a maximum of 75% to 96.5% against your property. Knowing what your home is worth allows lenders to calculate your equity in the home. The more equity you have, the better terms you will receive on your refinance.
HOME IMPROVEMENTS
If you’re doing home improvement projects to increase the resale value, you want to make sure you’re not pricing it out of the market. If your home is already priced on the high-end for your neighborhood, making too many improvements could make it more difficult to sell. When you get a valuation, you can see how your home compares with others in the neighborhood and this will help guide your home improvement decisions.
QUALIFYING FOR CREDIT
If you want to borrow cash against your home, getting a Home Equity Line of Credit (HELOC) is a good option. To qualify, you must have a certain level of equity in your home. Most lenders require at least 20%. Getting a home valuation will help you determine if you qualify as well as how much you can borrow, and it will be used by the lender to make a decision on your loan.
PLANNING
Though it’s not a necessity, simply knowing the value of your home is good information to have. It will help you plan for the future and deal with unforeseen circumstances when you might be in a position that requires extra money or a quick relocation. Knowing how much equity you have in your home and how much you may be able to borrow against it or sell it for will help you respond to any financial challenges that life throws at you.
