How to Value a House: A Complete Guide

The following are the steps to arrive at the true worth of a property.

1. Understand the Factors That Affect Value

The price of a home does not just depend on the square footage. Depending on several factors, its worth is dictated:

• Location: Houses in favorable neighborhood or proximate to facilities tend to be valued at a better platform
• Size and Layout: an addition of bedrooms and bathrooms increases the value of a      house.
• Condition: Homes that have been renovated and looked are able to fetch a higher price.
• Market Trends: Prices can be influenced by a sellers or buyers market.

2. Research Comparable Sales (Comps)

Comparables are regularly used by real estate agents and appraisers: nearby properties that are of the same size, location, and features and that were recently sold.

• Examine sales of 3-6 months.
• Concentrate on real estate to a short distance.
• Adjust difference in price (such as extra bathrooms or larger lots).

3. Use Online Valuation Tools

There are websites that estimate home value such as Zillow, Redfin and Realtor.com which report what the market values it. These are not always 100%, but it is a ballpark figure, on which to begin.

4. Hire a Professional Appraiser

The true way of valuing house is through an appraisal. It is ordered by lenders prior to approving a mortgage, although sellers and buyers may also order one to be sure of what is actually contained on the title. The value is determined by appraisers based on the faith to comps, the condition of property and the market trends.

5. Evaluate the Home’s Income Potential

The income approach should be considered in case the property can be rented. There is a possibility of the higher market value of a home producing high rent.

6. Factor in Upgrades and Renovations

Any modernisation of the kitchen, new bathrooms and energy efficient use would increase the value. But not every renovation is worth a full-on investment payback- it is the upgrades that are important to buyers.

Final Thoughts

Learning how to determine the value of house will put you in an advantageous position during negotiations, allow you not to overpay, and determine the proper price of your property. Combine research, professional expertise and market judgment to give the most accurate answer.