Figuring Out What My Home Is Worth
By author. Filed in Uncategorized |
If you are thinking about selling your home or refinancing, you know you will eventually face an appraisal. There are ways to estimate your home’s worth based on some of the same things a realtor will consider when listing it. There are some real estate websites that will let you look at homes listed in your neighborhood and ones that have recently sold. This can be helpful in estimating what your home will be worth, but you won’t know for sure until an appraisal actually happens.
The problem with selling or re-financing your home is that most people aren’t prepared for an appraisal that doesn’t come out. Appraisers are under more scrutiny than ever before and they are looking closely at comparable properties in the recent marketplace, regardless of what homes were worth six months ago. In fact, even if you had an appraisal done six months ago, most lenders won’t accept them for re-financing or when you sell your home. You will be faced with a new appraisal that will determine what your home is actually worth.
There are a few tips you can use to come up with an estimated appraisal value. If you look at home sales that took place in your neighborhood and divide the sale price by the square footage of the house, you can get a general price per square foot, which can help you estimate the value, based on everything else being equal. If you have an extra bedroom, your house will have additional value and an additional bathroom can make a difference, too.
Another thing to consider is the condition of your roof, interior, and other components because appraisers will subtract value for sub-par components, or those that are going to need replaced. A good rule of thumb is to know the marketplace in your neighborhood or houses for sale and those that have recently sold to see how you compare. Chances are, if there is a home listed that is bigger than yours and in better condition, it will become part of the comparable sales when it comes time for your appraisal, whether for re-financing or listing your home for sale.
Many homeowners think that an appraiser will consider what you owe and then decide how much more you should get. The fact is that the appraisal doesn’t consider what your mortgage balance is and you can end up disappointed when you find out your home is worth less than is owed, causing you to be out of equity or upside-down in the house. Homeowners that are used to the appreciation of recent years might be disappointed to find out their home has lost that appreciation when it comes appraisal time.
Much like trading in your car, there is a possibility that you will be upside down and left with no choice but to short sale the home, or come up with the extra owed at closing to pay off the loan. The only other alternative is to wait out the current market in hopes that home values and appraisals will start to go up again.
Tags: appraisal, home value, real estate