How to Determine the Value of Your Home

There are basically two ways to determine the value of your home: an appraisal and a comparative market analysis. We’ll explain both of these below.

What is an appraisal?

An appraisal is done by a certified appraiser. The cost usually ranges from about $250 to $350. The appraiser considers a number of factors in order to place a value on your home.

These include:

What is a comparative market analysis?

This method is less precise but is typically free. A comparative market analysis is usually carried out by a real estate agent. The agent considers the sales prices of a minimum of three properties in your neighborhood or a similar neighborhood. The agent chooses properties that are comparable to your home in age, style, size, location and construction type. Then the average of these comparable properties’ prices is adjusted to reflect the differences between your home and the other properties.

A comparative market analysis may potentially be affected by factors unrelated to the value which an appraiser would determine. For example, if the seller of a comparable property experienced personal life circumstances causing him or her to sell at a rock-bottom price, this could pull down the average market value even though it does not reflect objective value. So don’t forget that the market value of your home estimated through comparative market analysis may be different from an appraisal and from a potential sales price. Our loan consultants can help you sort out the possible valuations of your home, and see how they will affect your refinance.

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