Homefinding Book

by: Homefinding Book (1605)

You will come across many things when buying your first home that will have you scratching your head. Finding the value of your home before you buy shouldn’t be one of those things. Unfortunately, for many buyers this is one of the most difficult things to come across. There are many reasons for this not the least of which is that there really are not set values for a home.

The value of a home is something that can fluctuate from day to day, person to person, and situation to situation. Most people find that the actual appraisal value of their home for the purpose of a mortgage does not reveal the same numbers that are assigned to the value of the property for the purpose of property taxes.

With such wide discrepancies in value, how can you know if you are bidding too little or too much on any given property? Ultimately, the house is worth what you would be able to sell it for if you needed to get out from under the note suddenly. You need to be able to get at least a general idea of the actual worth of the home you are considering before you can place a realistic bid on the house.

Realtors

This is where it pays to have a working relationship with a great Realtor. While it is very unlikely that the Realtor can tell you exactly what a house is worth, he or she can pull comparisons -otherwise known as comps - of similar sized and aged homes in the area. This will give you a good general idea of how much the house is worth and you can use other factors such as condition, upgrades, etc. compared to the other homes to determine whether you feel comfortable offering more or less on the house you are considering.

Appraisers

You can have an appraisal made. It is important to remember that appraisals are generally made so that the banks are confident lending the money so that you can make the purchase. In other words, they are not always the most reliable source for obtaining the actual market value of your home. They are not going to be significantly higher than the actual value of the home in general. There are occasions though when you are purchasing the home for an incredibly low bargain rate that the appraisal will reveal a lower market value for the home than you expect. If this happens, make sure you keep other resources in mind before you decide to pass on the house as a result.

There is also the option to have an independent appraisal made. This will not be at the behest of the bank and may give you are more unbiased value. The problem with an independent appraisal is that it can be quite costly. However, if you are preparing to make improvements to the home or feel as though you need an absolute value this is a way to get an honest estimate for the home’s value.

Internet Resources

There are websites that will compare your home to others that have recently sold in your neighborhood and give an estimated market value for your home as well. One of the best in the business for delivering accurate results is the free estimator at Homegain. These websites use a number of formulas to determine this market value and are fairly accurate, all things considered.

The drawbacks to these types of services is that markets trend up and down quite regularly making the data a little bit dated in some cases. Another drawback is that these websites are limited in the areas they service to larger cities and may not work in the city you are buying a home just yet.

It always comes down to the value you place on a home more than anything else. Chances are that if you really want a particular home you will do everything in your power in order to make that home work for you -as long as you can get the financing you need to buy the home. If you are purchasing a foreclosure they will rarely be sold for more than their current market value unless you live in an artificially inflated market or are facing tremendous competition for limited housing options. Be sure you always check your estimates against the numbers at Homegain  though before you decide a home is or is not worth the investment.