How to Find the Appraised Value of a Home

Appraised Value of Your Home

An appraised value of a home is based on factors other than the inspection and comparison to nearby homes that have recently sold. Discover explains that a home’s market value is also based on the size of the home and land and its condition, location and age. For example, the exact same home would have a higher appraisal in San Francisco than it would in a small town in North Carolina.

Professional appraisers are brought in to conduct visual inspections of homes, but this is not always the case. When homeowners decide to refinance or get home equity loans, oftentimes, the lender will not require someone to do a physical assessment. Sometimes, though, municipal property assessors determine that an appraised value is inaccurate, and they will step in to establish what they feel is more appropriate. Note that homeowners can also challenge the appraised value of their home in most jurisdictions, which will impact property taxes.

Our Verdict

We chose Zillow as a top option because it has a database full of listings that yields estimates with a 1.9-percent on-market and a 6.9-percent off-market median error rate. Redfin is a solid runner-up choice, with a 2.24-percent median error rate for on-market homes and a 6.74-percent rate for off-market homes and an easy way to get a free comprehensive analysis.

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How to Calculate Your Home’s Assessed Value

If you are wondering what  the value of your home is and want to calculate the assessed value, you would need the property’s market value and assessment rate. You can then use this equation:

Assessed value = (Market value x Assessment rate) / 100

If the market value of your home is $300,000 and the assessment rate is 80%, the assessed value is $240,000.

You can also use your property tax bill and the real-estate tax rate of your county to calculate the assessed value of your home with this equation:

Assessed value = (Property tax bill x Tax rate) ✕ 100

If your property tax bill is $2,400 and your county’s department of finance tells you the real-estate tax rate is 1%, you can see that your assessed value is $240,000.

Key takeaways

The prospect of closing the deal on a sale becomes much less intimidating when you’re heading to market with a carefully researched valuation in your back pocket. Remember, the goal is to sell your home at the right time and the right price according to your needs.

Rebecca Lake

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.

What factors affect home value?

A number of factors can affect the value of your home, including:

  • The neighborhood
  • Its age
  • Its condition
  • Its size
  • Any home improvements or upgrades

There are other factors that impact property values overall, too. These include the local housing market, economy, interest rates and tax rates, Reed says.

How Long Does a Home Appraisal Take?

The appraisal process takes an average of seven to 10 days. The appraiser visits the property and spends an hour or two inspecting the home's interior and exterior, measuring the square footage, and evaluating the home's features and fixtures. The appraiser also compares the home to other similar, recently sold homes in the neighborhood (aka "comps"). After doing the physical inspection and running the comps, the appraiser writes an appraisal report. The amount of time it takes for the entire process depends on the complexity of the appraisal and the appraiser's workload or schedule.

The Advantages of Using One of the Best Home Value Estimator Sites

Home value estimator sites will never be 100 percent accurate. This is because these sites each use various methods to compile their values. But just because they aren’t 100 percent accurate doesn’t mean that they aren’t helpful. For instance, a user may want to know the value of their home before attempting to refinance or sell it without having an appraiser assess it. Appraisals can be very costly, running upward of thousands of dollars depending on the property’s size. So before putting money down, it would be a good idea to see how much the home is worth. Home value estimator sites give a user a ballpark average of a home’s value.

  • The estimate is immediate.
  • A home value estimator is a free tool.
  • Since a home value estimate is free, users can get several estimates and compare them.

What to do before the appraiser arrives

Let’s be honest, a clean house will make a better first impression on anyone — and that includes an appraiser.

“When I drive up, I can tell right away if someone takes care of their house or not,” says Gargano. “It’s just that feeling that you get.” If you want to make sure your home appraises for top dollar, take the time to prep for the appraiser’s arrival and do any of all of the following:

  • Clear away clutter
  • Tidy up the house inside and out
  • Make sure your property is accessible
  • Put together a home fact sheet with your agent
  • Make minor repairs
  • Secure any pets
  • Plan to be away yourself, or be patient and don’t rush the appraiser

Refinance

Refinance your existing mortgage to lower your monthly payments, pay off your loan sooner, or access cash for a large purchase. Use our home value estimator to estimate the current value of your home. See our current refinance rates and compare refinance options.

What Happens After the Appraisal?

After the home appraisal is completed, the next step is mortgage underwriting. The underwriter reviews the loan file to make sure everything is in order and that all the required documents have been submitted. The underwriter then assesses the risk associated with the loan and either denies or approves the loan based on all the information.

Tracking Your Homes Value

We’ve watched home values go up most of our lifetimes. Rising home prices have a significant effect on our wealth, and ability to borrow. Even if you don’t plan to sell your home, watching your home’s value increase over time can be a lot of fun.

Many people have used their home equity smartly to consolidate personal debt or to invest in building a business from their home. While it’s important to always understand your asset values, try not to get attached to the ups and downs too much.

Remember, these websites and others let you watch your home’s value grow aren’t exact, and the only time you’ll get a true answer to the question “how much is my home worth?” will be when you go to sell or borrow against the home.

If you want “the real thing” – as in, a price that reflects every factor that goes into a home’s sales price – you should meet with at least 2 or 3 realtors or mortgage lenders to get price suggestions.

Chances are, a realtor will be able to offer more insight into your local market than any online real estate tool ever could.

Factor in your home improvements and upgrades

An appraiser will factor home improvements and upgrades into your home’s appraised value, so you should, too. Provide your agent with a list of improvements, or point them out when they see your home for the first time. But don’t expect to see a dollar-for-dollar return on investment.

While James Gargano, an appraiser who has been in the business for 35 years says that, “Bathrooms and kitchens, if done well, will always help a house sell and achieve profitability (or return),” other home improvements might not put the same amount of money back in your pocket.

According to a 2019 survey by the National Association of Realtors, here’s the benefit you might see from common upgrades:

  • Fresh interior paint – 107% ROI
  • New roof – 107% ROI
  • New wood floors – 106% ROI
  • A new garage door – 95%
  • HVAC replacement – 85%
  • Converting a basement to livable space – 64% ROI
  • Bathroom renovation – 57% ROI
  • Converting an attic to livable space – 56%
  • Fresh paint on the home exterior – 55% ROI
  • Kitchen upgrade – 52% ROI

The value you’ll really get from an upgrade can depend on your area’s climate — a new air conditioning unit matters more in hot climates — and the beginning age and condition of what you’re replacing or sprucing up.

If you’re unsure of the value a repair will add to your home, you can get an appraisal from someone with their finger on the pulse of the market. “Appraisers can, and we often do cost benefit analysis, which is an analysis of your proposed improvements and the likely yield associated with the completion of those improvements,” says Cullen.

Source: (Tetiana SHYSHKINA / Unsplash)
Source: (Tetiana SHYSHKINA / Unsplash)

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The Bottom Line: Keep Track Of Your Home Value

Before you can sell your home, you need to know what it’s worth. Knowing your home’s value will help you determine an accurate listing price and, hopefully, will help your home sell much faster.

You can determine home value by using an online valuation tool, hiring an appraiser, using a real estate agent, or checking comparable homes in your area. Using an online valuation tool or pulling comps in your neighborhood is easy and quick, but you’ll receive more accurate results using a REALTOR® or appraiser.

If you’re looking for ways to increase your home value, be sure to check out our guide for more recommendations. Or if you’re looking to refinance your home, you can get started today with Rocket Mortgage®.

Bottom line

No single home valuation method is guaranteed to be 100-percent accurate. That’s why using a combination of resources can help give you a more informed perspective of what your home is worth.

For example, you might get a free CMA and conduct your own research using an online home value estimator, as well as the FHFA calculator and county auditor’s website. Additionally or alternatively, you could pay for a professional appraisal. Averaging together all the final values you gather could give you a more accurate picture of your home’s value.

Ultimately, however, the most reliable home value estimates come from professionals who take the time to carefully assess your property based on a variety of factors.

“All of the evaluation tools are useful in giving an idea of the worth of your home, but an appraiser and/or an experienced agent will be the most accurate sources for determining value,” Krasow says. “A trained professional will have an advantage, as a computer cannot determine intrinsic value or consider the condition and improvements you’ve made to your home.”

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