Even if you aren't looking to sell your house in New Jersey right now, it's completely normal to wonder how much your house is currently worth.
If you're a homeowner, you've probably seen the quick online home valuation tools that give you an "instant number" for what your home is worth. While these might seem like they're based on intelligent algorithms that assess other property values and recent sales, the bottom line is that they are not reliable.
Property appraisers are still in business, meaning the need for a human touch (and intelligence) is still important to home valuations. Property appraisers charge hundreds of dollars for a proper assessment. An accurate home valuation just isn't someone you can get online for free, despite how legitimate it might seem.
The only true value of your home lies in whatever someone else is willing to pay for it. However, there are still ways you can figure out what your house might be worth. Here are four tips to assess your property's value.
1. Look at Your Property Tax Bill
Depending on which state, county, or city you live in, houses are regularly assessed for property tax purposes. Your local government needs to know how much your home is worth to determine how much money you'll pay in taxes each year.
Most states assess homes for tax purposes every 5-7 years. In New Jersey, homes can be inspected annually in some counties, while others assess your property every 5 years. If your home was assessed recently, it could be a strong starting point for finding out the value of your home.
This is only a helpful option if your house was recently assessed for property taxes. If your home was last evaluated when you purchased it decades ago, then the current value of your home is probably much higher.
2. Analyze Selling Prices for Other Homes in Your Neighborhood
This is a method experienced real estate agents use. Also referred to as "comps", you can view recent selling prices for homes that are comparable to yours. If you have a trusted real estate agent, you could ask them to pull some recent comps for you because you might be interested in listing your home.
If you're going the DIY route, you can check online real estate websites for homes recently sold in your neighborhood. You can also usually find out if homes went over (or under) the asking price on these websites, too.
It's best to look at the most recent data possible — ideally, you'll be able to look at data for the last 3-6 months. Look for selling prices for at least three homes, but if you can get closer to 10 homes you'll probably have a decent estimated sales price.
What makes a home comparable to yours? Look for houses as physically close to yours as possible, including the square footage, number of bedrooms, number of bathrooms, total lot size, material used to build the house, whether it has a garage or not, updated kitchen, etc.
Don't forget to be honest with yourself throughout this process. If your house was built in the 80s and doesn't have any modern upgrades, you shouldn't compare it to a home that upgraded everything last year. That won't give you an accurate idea of the value of your home.
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3. Consider Local Inventory
The amount of homes for sale in your area also plays a huge part in the value of your home.
Certain housing markets just don't have many homes for sale. In these areas, it usually doesn't even matter if your house is similar to others on the market — it will be desirable and fetch a high selling price simply because it's an available home.
A great example of this is the San Francisco Bay Area, where there's little to no inventory regardless of which neighborhood you're looking at. In San Francisco, even complete tear-down homes sell for over $1,000,000 because buyers are willing to pay whatever they need to secure a home in the area.
While these extreme markets are rare, it's still an important factor when it comes to your home's value. This goes both ways, too: if your area has too many homes for sale, you might have to compromise a bit on your asking price if you really want to sell.
4. Look at Online Estimates (With a Grain of Salt!)
We know — we warned you about this earlier on in the article. While online home valuation tools aren't accurate, they can still provide a ballpark price range.
We recommend using the online tool from the Federal Housing Finance Administration. It looks at when you purchased your house, what you paid for it, and what it might be worth today based on the current market.
While you can still get a quick baseline estimate, we prefer to avoid online home valuation tools for a few reasons:
Algorithms don't get comps right - Online home estimate tools go through the same process a local real estate agent would to assess your home's value: looking at comps. However, the algorithms aren't as good as humans are at picking comparable homes. This leads to inflated home values and disappointed homeowners.
These websites haven't seen your house - Without an actual walkthrough of a home, it's nearly impossible to accurately depict its value. No free online tool is able to evaluate your home based on its flooring, appliances, finishes, countertops, or other upgrades you've made. All of these interior considerations are crucial to your home's value.
It doesn't work well for individual properties - Online tools can be relatively accurate for cookie-cutter houses in recent developments. These are all incredibly similar, if not the exact same, and there are lots of other sales to base the value on. However, it's much more difficult for an online tool to capture the value of a unique home.
Looking for an Assessment of Your New Jersey Home's Value?
Home valuations are best left to the professionals. With 30 years of experience, you can trust The Aneja Team to provide an accurate estimate of your home.
Contact us today and schedule your FREE market analysis!
