When you’re getting ready to sell a house in Minneapolis, understanding the value of the property is essential. Figuring out your home’s worth can make the difference between a quick sale and a multi-week listing with few potential buyers.
We’ll guide you through the key steps to calculate your home’s value.
Why knowing your house’s value is important for planning a sale
Understanding your home’s value can help you price your listing correctly, which should attract the right buyers and prevent the property from lingering on the market. Sellers who overprice their house may have a harder time selling—or may even have to refresh the listing by pulling their house off the market and re-listing it at a lower price. On the other hand, underpricing can mean leaving money on the table.
By knowing the value of your home, you can:
- Price it competitively to attract more Minneapolis buyers.
- Avoid costly price reductions and a long sales process.
- Make informed decisions about where to invest in repairs and renovations.
Factors that affect your home’s value in Minneapolis
Several key factors impact the value of houses in Minneapolis. Understanding these can help you get a realistic sense of your property’s worth:
- Location: Being close to top-ranked schools, transportation options, and Minneapolis amenities like Loring Park can do a lot to boost a home’s value. Desirable neighborhoods with strong demand tend to fetch higher prices.
- Condition and age of the house: The age and upkeep of your property impact valuation. New construction and well-maintained older houses usually hold higher property value.
- Recent renovations or improvements: Up-to-date kitchens and other renovations tend to boost home value.
- Market trends and demand: Real estate market cycles affect pricing. In a seller’s market, demand is greater than supply, raising property values. In a buyer’s market, sellers might need to lower the asking price.
- Size and layout: Larger houses typically have higher values, especially if they offer appealing features like extra bathrooms and roomy backyards.
- Comparable homes in the area (comps): Recently sold houses in your neighborhood that are similar in size, style, and condition provide a basis for estimating your home’s fair market value.
Types of home valuation
Here are the main types of valuations that a Minneapolis seller should be aware of when listing a house:
- Assessed value: This value, determined by local government assessors, is used for property tax calculations. While helpful for tax purposes, assessed value tends to be lower than market value and usually isn’t suitable for setting a listing price.
- Appraised value: A professional appraiser assesses your house’s worth based on factors like size, location, and comparable recent sales, or comps. This valuation is commonly used in the home-selling process, especially if a buyer is getting a mortgage.
- Market value via comparative market analysis (CMA): Real estate agents use CMAs to estimate market value by comparing your house with similar homes sold in the last six months. They look at houses of similar size, type, and location, typically calculating value using 250-square-foot increments.
How to find out your home's value before selling
There are several ways to assess your house’s worth in Minneapolis before you put it on the market. Here’s a breakdown of the most effective methods:
- Online home valuation tools: Online calculators are good for sellers who want a rough estimate of home value. Keep in mind that these tools don’t account for specific property features or recent upgrades, which means that you’ll likely be getting a ballpark number. FHFA House Price Index (HPI) calculator: Provided by the Federal Housing Finance Agency, the HPI calculator estimates home value changes over time based on appreciation rate. While more accurate than some online calculators, it doesn’t factor in unique property features.
- Hiring a professional appraiser: An appraiser provides an expert, detailed valuation by examining your home’s size, condition, location, and comparable local sales. A professional appraisal tends to be highly reliable and is a great way to determine your house’s value.
- Comparative market analysis (CMA): A CMA compares your home to recently sold properties that are similar in size, layout, and location. CMAs are standard practice for agents, helping to set an accurate listing price that lines up with market trends.
When to consider a professional appraisal
A professional appraisal can be valuable in certain situations. If the market is uncertain or you think comps won’t tell you the full story about your house, getting an appraisal might be worth it. 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
- Over-relying on automated tools: Online calculators can be inaccurate and shouldn’t be the sole basis for setting a price.
- Ignoring market conditions: Try to consider whether it’s a buyer’s or seller’s market, and adjust your expectations accordingly.
- Neglecting home improvements: Failing to account for upgrades can cause you to undervalue your property, while overlooking necessary maintenance can lead you to overprice it.
- Overlooking your house’s selling points: Special characteristics, like a finished basement or high-end appliances, can add value if marketed correctly.
