Accurately determining your house’s worth can make the difference between a fast, profitable real estate sale and a home listing that doesn’t get a lot of attention.
Let’s discuss what to keep in mind when calculating your house’s value. Applying these strategies should help you price your house properly for the Houston market, leading you to the right sale.
Why knowing your house’s value is important for planning a sale
Figuring out your home’s value has several advantages. First, it helps you price your house correctly, which should attract the right buyers and reduce the length of time your property is on the market. Overpriced houses can be hard to sell in the Houston area. Underpriced houses can sell quickly but add up to less profit for the seller.
By knowing the value of your Houston home, you can:
- Set a home sale price that will draw your most likely buyers.
- Avoid lowering your asking price or even having to re-list your property.
- Make informed decisions about paying for repairs or renovations before putting your house on the market.
Factors that affect your house’s value in Houston
Here are some of the factors that can impact the value of a Houston home:
- Location: Being close to desirable schools, green spaces, and hot Houston neighborhoods like the Museum District can do a lot to boost your house’s value.
- Condition and age of the house: The age and condition of your house will almost always impact your property value. New construction and maintained older homes tend to hold more value.
- Recent renovations or improvements: Updated kitchens and bathrooms, as well as features like swimming pools and solar panels, can increase home values in Houston.
- Market trends and demand: In a seller’s market, housing demand is greater than supply, which means you might be able to sell for a higher price. In a buyer’s market, the opposite applies, and you may get a lower price for your property.
- Size and layout: Larger houses typically have higher values, especially if they offer appealing features and layouts.
- Comparable homes in the area (comps): Recently sold homes in your area that are similar in size, style, and condition offer a baseline for estimating your home’s market value.
Types of home valuation
Valuations are ways of determining your house’s worth. Here are the three main types of valuations you should consider:
- Appraised value: A professional appraiser evaluates your house’s worth based on factors like location, size, condition, and neighborhood comps. This valuation is frequently used in the home-selling process, especially when the buyer uses financing.
- Market value via comparative market analysis (CMA): CMAs estimate market value by comparing your house with similar homes sold in the last six months. The CMA formula involves looking at nearby houses of similar size and type, typically calculating the value based on 250-square-foot intervals.
- Assessed value: This value, determined by local assessors, is used for property tax calculations. While valuable for government purposes, this figure is usually lower than market value and is rarely used to set a selling price.
How to find out your house's value before selling
There are several ways to assess your house’s worth in Houston before you put it on the market. You can try:
- Online home valuation tools: Online calculators are good for getting a basic estimate of your home’s value. Keep in mind that these tools don’t consider your house’s unique features or recent upgrades, which means that you’ll likely want to use other methods as well.
- FHFA House Price Index (HPI) calculator: A free calculator provided by the Federal Housing Finance Agency, this tool estimates home value changes over time based on average appreciation rates in your area. While more accurate than some online calculators, the average doesn’t factor in data points like home condition and amenities. Plus, the HPI calculator average is based on the entire Houston-The Woodlands-Sugarland area and may not apply to your specific community or neighborhood.
- Hiring a professional appraiser: A home appraiser can provide a detailed valuation by evaluating your house’s size, condition, location, and comparable sales. A professional appraisal can be considered a reliable source of home-value information.
- Comparative market analysis (CMA): CMAs (frequently called “comps”) are used to compare your home to recently sold properties that are similar in size, layout, and location. CMAs are regularly used by real estate agents to set a price that matches with market conditions. While not as formal as a professional appraisal, CMAs are often an excellent way to find out your house’s value.
When to consider a professional appraisal
A professional appraisal can be very helpful in certain situations. If your Houston property has features that could throw off a CMA, investing in an appraisal might be worthwhile. According to Angi.com, the average seller can expect to pay around $350 for a home appraisal.
Common mistakes to avoid when valuing your house
- Overusing automated tools: Online calculators can be inaccurate and should be taken with a grain of salt when setting a home sale price.
- Not considering home improvements: Failing to factor in the value of past upgrades can lead you to undervalue your property, while overlooking essential repairs and renovations can lead you to set your price too high.
- Ignoring market conditions: Always consider whether it’s a buyer’s or seller’s market, and try to price your house accordingly.
- Overlooking special features: Special characteristics like swimming pools and energy-efficient home features can add value if marketed correctly.
We Buy Ugly Houses® buys all kinds of properties.
Our Houston team buys all kinds of houses. We offer “as is” sales, which means you don’t have to do anything to boost your home value. If the market slows down, if your valuation isn’t what you thought it would be, or if you simply want a fast, convenient close, consider giving We Buy Ugly Houses® a try.
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