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How to Figure Your House's Market Value
The fair market value is your house’s price if you were to sell it in the open market. It is based on several factors, including the real estate’s economic value. Knowing your house’s fair market value will help lenders refinance or approve your home equity loan and is used by tax assessors to calculate your property taxes. It is also used by insurers as a basis on what insurance premiums best fit your real estate in cities like Broken Arrow. Here are some of the tips on how to check your house’s fair market value.
Research the selling price of other properties in your area. Compare other houses for sale similar to yours in your neighborhood. Location is important to real estate so it is important to compare your house to others for sale. Don’t compare your property to houses that are located elsewhere as they may have a completely different market value than your own. Also called as the market approach by brokers, this is the easiest method of evaluating your house’s market value. This is also the method that real estate agents use to calculate an asking price for a property.
Calculate your house’s generated income. If you are renting a part of your house, you can include the income that is generated to your house’s fair market value price. This is only applicable for houses that are being rented, condotels, and the like. If your house is only used as a residential property, then it would be best to allocate this step to a more suited residential property.
Calculate the expenses of replacing your house. You can do it by estimating the value of the land. Checking any empty lots in your neighborhood and figuring the average price per square foot is the best way to estimate your land's value. Next is estimating the cost of rebuilding your home, including the improvements and the fixtures that you’ve made.
Compare each of the results to get the best real estate value. Check the results of your research to come up with the most balanced, fair market value for your house. Getting the needed information may take time, but it’s required to get a reasonable value for your real estate.
Ask for a professional’s advice. If you still find it hard to assess your property’s fair market value, you may ask for a third-party appraisal from a professional. The appraisal reviewer must not be associated with any loan production staff or cannot stand to benefit from the lending transaction. These commercial and residential reviewers should have the requisite education, expertise, and the competence to perform the evaluation.