How to Determine Your Current Home Value

In 2021, single-family home prices rose by 17.8% nationwide—the highest recorded annual jump in United States residential real estate. That’s great news for homeowners, but what exactly does it mean for your property value? 

It can be confusing to compare different dollar amounts related to your house’s value, whether you’re crunching the numbers on your annual property tax assessment or using a home equity calculator that estimates a price tag based on your address.

In this quick guide, we’ll take an honest look at how to determine home value so you can sell, tap into home equity with a residential leaseback agreement, or simply track your investment portfolio on solid, accurate footing.

How to Determine Market Value of Home in 5 Ways

The value of your home is influenced by an array of factors, but the most important ones are: 

• Property size, layout, features, and condition
• Property location, including its school district
• Market conditions like interest rates and the number of potential home buyers

Any given property value may change based on mutable variables as well as market fluctuations. Because of this, there are several ways to define and interpret the value attached to your property, all of which may paint an accurate portrait of your home’s worth.

#1 Assessed Value

You’ve probably received an annual property tax update from your state or local jurisdiction. These notices should detail two things:

• What you’ve paid in property tax for the current year, based on your home’s assessed value

• Any change in assessed value and tax amounts for the coming year

Local tax assessors are responsible for assigning a dollar value to each property in their district, but this number is solely for tax purposes. 

While the annual change will reflect the upward (and occasionally downwards) fluctuations in the local real estate market, assessed values tend to be lower than what your home would actually sell for. 

#2 Online Valuations

If you search for anything related to home value online, you’ll find several things such as a  home value estimator, a valuation tool, and a calculator of all types. These calculators typically prompt you to plug in your street address and some details about your residential property, and the site will immediately offer you a current market value. 

These tools, such as a home value estimator, apply an automated analysis solely by aggregating recent sales data on similar properties and pricing your home in relation to those. While these values can help frame your understanding of a home's value, they are an estimate and not as precise as other methods for determining the current market value.

#3 Fair Market Value

Fair Market Value is typically calculated by real estate agents, who use comparative market analyses to determine the market values of homes. Realtors are fluent in reviewing these comparable sales (or “comps”) through the lens of local housing market trends, which can suggest how minor differences between your house and a similar one may tweak your home's worth. A professional home appraisal can also provide an accurate assessment of your property's value.

That said, you may be able to gauge your home's fair market value on your own. You can accomplish this by reviewing the public record of similar homes' sales and estimating the market value of your home based on comparable sale prices in the local housing market.

#4 Appraised Value

While fair market value and appraised value can both help you determine the value of your home, it is important to understand the differences between an appraised value vs market value. A home appraisal by a licensed professional appraiser considers both comparative market analysis and the specific features of a residential property. The appraiser visits the home and evaluates: 

• What it would cost to rebuild the home today
• Unique features and shortcomings of the property
• Current real estate market conditions

Lenders rely on licensed value appraisals to accurately identify a home's value and approve a mortgage or assess home equity. This method is typically considered the most accurate valuation before figuring out the actual sale price or considering a home equity loan.

Note that, while it’s an educated assessment, value appraisals are still one individual’s estimation—in some cases, two different appraisers may return with slightly different results. 

#5 List and Sale Price

With a fair market value and the appraised value in hand, a property owner can finalize the asking price when putting their property on the market—this is the list price.

Ultimately, however, the value of any commodity is simply what someone else is willing to pay for it at a given moment in time. If you ultimately want to know how to increase your home value you should understand that the final call on your home’s value is its sale price, which is determined after three phases have been completed:

• The potential buyer pool is whittled down to a single-home buyer
• Pre- and post-inspection negotiations are over
• The homeowner signs the sale contracts at closing

Truehold: Acquire Your Home's Market Value Without Saying Goodbye

Many modern homeowners find themselves caught between keeping their home and leveraging its value by cashing in—but you don’t have to choose between the two.

With Truehold’s Sale-Leaseback, you can leverage one of the largest assets in your portfolio to fund a business venture, retirement travel, or pay off debt while continuing to stay in your home. What’s more, you won’t need to vex over repairs, fees, or commissions—when you sell your home to Truehold and lease it back, we pick up the stress and responsibility for all property maintenance costs, ensuring the stability of your property value and current market value.

Learn more and consult with an advisor today to see if Truehold is the right solution for you.

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Sources: 

1. Home Buying Institute. House Values 101: Appraised, Assessed and Fair Market Value Explained. http://www.homebuyinginstitute.com/house-values-101.php

2. Statistica. Freddie Mac House Price Index price appreciation from 2010 to 2023. https://www.statista.com/statistics/275159/freddie-mac-house-price-index-from-2009/