How to calculate what your home is worth these days

April 28, 2021, 11:00 PM UTC

Home prices nationwide are breaking records. The National Association of Realtors says the median existing-home sales price in March hit a historic high of $329,100. And over the past 10 months, the average home’s value has gone up 16%.

That has a lot of people wondering if it’s worth cashing out of their home. And even more wondering what their house is worth.

Determining that value, of course, is something of a crapshoot. A lot will depend on the supply of available homes in your area. If you’re one of a small handful of properties available, you’ll likely be able to command a higher price—or could find yourself in the middle of a bidding war among buyers.

The best method is to contact a realtor and have them run neighborhood comparisons and suggest a range. But if you’re only curious, that’s not a fair use of their time—and could result in a regular stream of calls from realtors looking to satisfy their clients.

So how can you determine your house’s value? There are a variety of tools you can use. A smart idea in the current environment is to use several and average the figures (which can be wildly different). It might not be 100% precise, but can give you an approximate value that will help you determine if you want to consult a professional to get a precise quote.

Check leading real estate sites

Websites like Redfin, and Zillow have, for years, put estimated values on homes, using tools called automated valuation models. These use public records such as property transfers and tax assessments to make estimates, but they might not factor in improvements you’ve made (like new countertops or floors).

Keep in mind, those prices are meant to drive you to a realtor, so they’re not entirely reliable. That’s especially true in rural areas, where there are fewer sales. They also fluctuate wildly between the three sites. (A search of my home showed a variance of over $12,000 between the three.)

Use the FHFA house price index calculator

The Federal Housing Financing Agency isn’t trying to make a commission, so its house price index (HPI) calculator could be another tool for your kit. The calculator tracks a house’s change in value between sales and estimates how values change in a market. It isn’t adjusted for inflation or seasons, though.

Check the competition

One of a realtor’s best tools in determining home prices is looking at what similar homes in the area recently have sold for. You likely don’t have access to the MLS system they use, but you can hop on online listing sites and see what a house with the same approximate square footage and bedrooms/bathrooms is listed for near you. Plus, most local newspapers still carry home sale announcements on a weekly basis, giving you completed sale prices. It’s not the same as a comparative market analysis, but it could save you a little money and definitely will keep you from being stalked by a real estate agent if you’re just looking.

Hire an appraiser

Getting serious about selling? Having a professional appraiser come in to put a value on your home is a way to get very precise. It’s the tool lenders use before they’ll approve a mortgage. You’re looking at an average of $300 to $450 in out-of-pocket expenses for the study, though. They’ll look at both local sales, the condition of your home, the local market, and the size of your lot before determining a value. Then, they’ll deliver it to you in a formal report, which you can use to justify your price if potential buyers try to lowball you.

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