Whether you are selling or just curious about its value, it’s crucial to know your property’s worth—and if your real estate investment has improved during your tenure. You can get some basic information online. Drilling down that magic number can help you decide if you should sell and what you might gain from doing so.
How to find home value estimates online
One easy starting point to get your home valuation is to enter your address into an online home value estimator. Within a moment or two, our online tool will give you a rough estimate of your home’s worth. Square footage and recent home sales in the area, along with other data, creates a ballpark number to consider.
However, for a more accurate estimate, there’s no substitute for the expertise of a qualified realtor. Our Homes and Lakeshore team has access to a vast database of information with recent sales throughout Otter Tail County and the surrounding region, plus knowledge about towns and neighborhoods, to help you define that number.
How real estate experts determine home value estimates
Real estate agents specialize in clarifying the question “what is my home worth?” for their clients, which they do by running a comparative market analysis. This process involves finding similar properties (“comps”) that sold within the past 90 days.
The most accurate comp is a home similar to yours in square footage, including the same number of bedrooms and bathrooms. The lot size should be equivalent, though that’s more important in rural areas. Knowing the area helps too. For example, a property in one part of Fergus Falls may be valued much differently than another part of town, even though they are in the same zip code. Your agent then averages those figures to come up with a baseline of your own home value. Additions or deductions are made for key features your home has, or does not have.
For instance, if your neighbor’s home is listed for $200,000 and you want to list yours at $300,000, you should be able to explain the “why” to prospective buyers. Otherwise, adjust your number.
A realtor will also take into consideration your selling goals when setting a suggested selling price. Do you need to sell your home quickly or are you ok with it being on the market for a while?
What is my home value to a buyer?
Buyers search for homes online in $25,000 – $50,000 increments. If your home’s fair market value is $303,000, many people may overlook your home and prevent your listing from being seen by buyers who are searching for homes in the $250,000 to $300,000 bracket. Asking for $300,000 might generate more traffic.
Try to remain objective
It’s difficult to boil down years or decades of memories in a home to a number. Don’t automatically expect to get more for your home than you paid for it or to get the full amount for the renovations you’ve made. On average, you will likely only receive about 64% return on your investment for most improvements, though that depends on the types of upgrades.
Why it’s important to know how much your house is worth
Setting your home’s value as too high may not find an interested buyer. That’s a problem because a property that goes unsold for an extended period (e.g., more than 30 days) can become stale. If that’s the case, the seller may have to make a price reduction to generate buyer interest, or address some other issue with the home. Higher prices may work somewhat in the seller’s market we are in, but as we are already seeing the market start to cool, buyers should be cautious of overpricing their home.
It’s best to know what your home is worth and list your home close to its market value. Listen to your real estate agent’s advice on pricing to cut through the fog and help you pinpoint the right starting point.