Home value is a critical aspect of financial planning. Over time, your property should theoretically appreciate in value so you can sell it and realize a return when selling it off later on.
But many factors can alter home values. You can determine its worth using free online valuation tools, hiring an appraiser, or working with a real estate agent.
Location
Location is one of the key components that determine a home’s resale value, with urban homes typically commanding higher resale prices due to amenities and transportation links; quality schools also play a vital role.
Numerous online tools offer home valuation estimates. They rely on various sources, including local real estate trends, comparable home sales data, and property listings to compile this estimate – which they do by processing millions of pieces of data using algorithms to produce an estimate.
However, these sites may not always provide accurate numbers; since they rely on public data sources they could be off by several percentage points at least and often miss upgrades or other modifications made to a property. Real estate experts advise using online tools as starting points but for more accurate numbers they advise consulting an actual local agent in person.
Upgrades
Homeowners have many choices available to them when it comes to upgrades that will enhance their living experience and make their property more marketable, but not every investment pays back in full when selling a property; some upgrades may even reduce value! Based on data compiled by real estate agents like those at HomeLight, we have identified both the most and least effective upgrades so you can decide where you should spend your money. We have also highlighted which upgrades should and shouldn’t be done.
Extended landscaping, solar panels, and luxury features such as heated floors may not add significantly to the resale value of your home. Furthermore, upgrades that have less of an effect – like installing a custom home theater – tend to have less of an effect. As a rule of thumb, upgrades with broad appeal should increase their value while those specific to your house may decrease it.
Features
Home value estimator websites vary considerably in features they provide to homeowners looking to sell their property, such as an advertisement section and glossary of mortgage terms. Many websites will also try and persuade users to utilize other real estate or mortgage products from them – which may become annoying while trying to figure out their home’s value.
Home value estimator tools work by comparing your property with similar ones that have recently sold nearby – known as comparable properties or comps. Online tools utilize county auditor and tax assessor records, public real estate transaction data, and user-submitted property details through an algorithm to arrive at an estimate of your home’s worth. Online tools have the capability of quickly analyzing large amounts of information almost instantaneously, providing estimates which may or may not be 100% accurate; nonetheless, they serve as a starting point for homeowners prior to listing or loan application as they make decisions regarding renovation investments versus waiting until market conditions improve.