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Is it Important to Know My Home Price Estimate?

Posted On Monday, 09 September 2024 11:42

Yes! An estimate of your home’s price can be highly beneficial if you want to sell your home, refinance it, or even just calculate your home equity. You can avoid getting an estimate as well, but it might come with consequences. 

32% of home sellers typically report having to reduce the asking price due to initial overpricing. Conversely, 75% of buyers overpaid for their homes and now need help to repay their mortgages.  

You can avoid such pitfalls if you get your estimate in advance by using online tools to get a free home price estimate. This can help you get a close-enough approximation of your home’s value. 

What’s a Home Price Estimate and How to Get One?

It’s an opinion on your home’s worth. It helps you to know what your house might sell for in the market. An estimation of your home’s value can guide you to set an asking price. You can get a free estimate of your home value online. 

There are three ways to determine the value of your home:

-  Online Free Home Price Estimator: Online home worth or price calculators can give you a quick, free estimate of home value based on criteria you enter.

-  Real Estate Agent: Get a CMA report from an experienced real estate agent for a more accurate valuation. You can adjust this valuation as per the size and specifics of your home.

-  Professional Appraisal: An appraiser’s report gives a valuation report to the lender.  This report helps you refinance or look for a HELOC. A lender will distribute the loan for a maximum of 70%-75% of the home valuation.

Benefits of Knowing Your Home’s Value

- Price Determination: If you are selling a house, you need to know the value of your home. You may already know the median selling price in your area. Knowing your home’s value will help you set an appropriate asking price.

- Refinance: Lenders allow a maximum of 75% to 96.5% borrowing against your house. Before refinancing, you might wonder how much is your home worth? The simple answer is that the more equity you have, the better the loan terms you would get.

- Making Home Improvements: To make the house more comfortable to live in or to fetch a better selling price, you will need some improvements. Kitchen remodeling or roof repairs can cost a lot of money. Understanding your home value is helpful before you make expensive home improvements.

- Getting HELOC: In case you want to refinance the mortgage, you may want to borrow cash against your house through a second mortgage, or a Home Equity Line of Credit (HELOC). Knowing your home value will help you get a HELOC, as getting one depends on having certain home equity.

- Being Updated: If you have no immediate plans to sell or refinance shortly, you can still keep yourself updated on your home value. If your plans change in the future, the home price estimation will help.

Bottom line 

A free estimate of your home value is advantageous if you have a desire to sell, refinance, or apply for a home equity loan. It also acts as a guide in case you have concerns about property tax assessment, estate planning, or settlement. 

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