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How to Determine and Increase Your Home’s Value

Understanding the value of your home is crucial, whether you’re planning to sell, refinance, or simply want to know your net worth. Home values fluctuate, and keeping track of your property’s worth can be challenging. According to the Federal Housing Finance Agency, home prices in the U.S. increased by an average of 9.82% year over year from Q1 2019 to Q1 2024.

How to Find Out How Much Your House Is Worth

There are several methods to estimate your home’s value. Here are three common approaches:

Option 1: Get an Online Valuation

Online valuation tools, such as those offered by Zillow, Redfin, and Realtor, use public data and algorithms to estimate your home’s value. These tools are quick, convenient, and free, but may not be as accurate if your home hasn’t been on the market recently.

Best uses: Online valuations are great for getting a quick estimate. They can help you determine if you have enough equity for a home equity loan or compare your home’s potential sale price to a new home you’re considering.

Option 2: Work With a Real Estate Agent

A real estate agent can provide a comparative market analysis (CMA) using recent sales data for similar homes in your area. Agents add human insight to the valuation process, offering tips on market trends, buyer preferences, and more.

Best use: If you’re serious about selling, a CMA offers a personalized estimate. An agent can also advise on repairs, upgrades, and staging to maximize your home’s value.

Option 3: Hire an Appraiser

A licensed appraiser provides an unbiased valuation based on market trends, comparable sales, and your home’s condition. Lenders require appraisals for home purchases and refinancing to ensure the loan amount is supported by the home’s value.

Best use: Appraisals are essential for loan qualifications but can also be useful for estate planning or during a divorce.

How Is Property Value Assessed?

Property values are assessed using several factors:

Property Basics

Valuations start with basic information about your home, including square footage, number of bedrooms and bathrooms, lot size, age, condition, and special features like a pool or sunroom.

Market Factors

Market conditions, such as national and local home sales, mortgage rates, and home availability, also affect your home’s value. Valuators consider your home’s sales history and comparable properties in your area.

Methodology

Online valuators use algorithms, while real estate agents and appraisers combine data analysis with personal inspections to create individualized valuations.

How to Increase the Value of Your Home

While you can’t change market conditions or your home’s location, you can make strategic upgrades to increase its value:

Update Your Home’s Finishes

Inexpensive upgrades like new light fixtures, paint, and cabinet hardware can modernize your home without breaking the bank.

Step Up Your Curb Appeal

Exterior improvements, such as a new roof, windows, siding, or paint, can make your home look well-maintained and attractive to buyers.

Make Energy-Efficient Improvements

Installing solar panels or a heat pump can reduce energy costs. Consider drought-resistant landscaping or shade trees to improve curb appeal and cut cooling costs.

Upgrade Your Kitchen or Bath

Kitchen and bath renovations can be costly but significantly increase your home’s value. Stick to designs that appeal to modern buyers to maximize your return on investment.

Add Square Footage

Adding an addition or accessory dwelling unit (ADU) increases your home’s square footage and value. Alternatively, create usable space within your existing home, like a small office or finished basement.

Clean and Declutter

A clean, uncluttered home makes a great first impression. Consider staging to help buyers visualize living in your home.

The Bottom Line

Knowing your home’s value is essential for selling, refinancing, or planning home improvements. Use online tools, real estate comps, or formal appraisals to get a comprehensive view of your home’s worth.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to help you navigate the complexities of home valuation and financing.

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