A home’s worth is one of the biggest considerations for homebuyers—incorporating factors beyond just the size or age of a house. So if you’re asking, “How much is my house worth?” here’s what you need to know.
What is property value?
Property value is an estimate of what a home or piece of land is worth. Sometimes referred to as the fair market value, this affects other costs like insurance rates and property taxes. Understanding how a property is valued can help you make savvy decisions when shopping for a new home.
How is property value determined?
Property value is affected by a number of factors, including external and internal characteristics, supply and demand and location.
- External: This refers to “curb appeal” factors, such as the condition, size and architectural style of a home. A well-maintained home built in a popular style will generally have a lot of curb appeal, for example. Other property elements—such as water and sewage systems and whether there are sidewalks—can also play a part.
- Internal: This is all about what’s inside. How many bedrooms does the house have? How many bathrooms? What condition are they all in? If it comes with appliances, are they new or old? Does the house have a good air-conditioning system? All of this can affect the value.
- Supply: Pay attention to the state of the market you’re in. If there’s only one home for sale in your desired neighborhood, it might mean the demand outweighs the supply. In other words, there are more prospective buyers than sellers. This can drive up the value of a home.
- Location: Is the house in a crowded, urban setting? A growing suburb? Or is it in a spot that’s remote and rural? The more desirable the area, the more it can increase the property’s value. Even if you don’t have kids, the quality of the school district is a factor as well.
Tax rates, inflation and population growth are a few other outside influences that can impact property value and, ultimately, the answer to your question: “How much is my house worth?”
How to determine fair market value of a house
You can figure out a house’s fair market value by looking at the values of similar homes. Start by listing key features of the property, such as its size, age and the number of bedrooms and bathrooms. Then, search online to find similar homes in the area that have sold within the past 90–120 days.
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