What is your house worth: How to find the assessed value of your home
Knowing the assessed value of your house can help you to prepare to sell, refinance your mortgage, adjust your property taxes, or decide to tap into your home equity with a home equity loan to renovate your home, consolidate high-interest debts, or pay for other large expenses.
What is your house worth?
If you’ve been seeing homes go up for sale recently in your neighborhood, you may have started to wonder what is my house worth?
While you won’t be able to easily place a dollar value on the memories and experiences you’ve had while living there, the answer to that question will differ depending on who evaluates your property and for what purpose.
You may find a broad range of prices when you start to look at these different values, so it’s important to understand where they all come from to get an idea of your home’s worth.
Assessed value of a home
The assessed value of your home is an estimation of its current price prepared by a municipal property assessor, and it is used to calculate property taxes each year.
The assessed value of your home is generally based off an assessment rate percentage determined by the local county or municipality of the fair market value or home appraisal value of the property.
If a municipal property assessor deems the market value and appraised value inaccurate, they will use a uniform percentage of each to determine the assessment rate.
Market value of a home
The true market value is the price your home would sell for in the current housing market. It is determined by a real estate agent or a seller and buyer during the negotiation process.
Market value of a home is based on a range of factors, including square footage, location, similar properties, market trends, and the condition of the home.
Appraised value of a home
The appraised value is determined by a professional appraiser, who conducts a visual inspection of the home and evaluates other appraisal standards.
This appraised value of your home can be used for refinancing or taking out home equity loans and for comparing to the market value. When purchasing a home, the appraised value is used by lenders to determine the amount of money they are willing to lend to a home buyer.
Knowing how much your house is worth may help you make important financial decisions.
How to find the value of a home
There are many resources homeowners can use to find out property values.
Use online tools to calculate the value of your home
You can use a home value estimator tool to learn the value of your house. These digital tools use your address to look up data from comparable homes in your area.
They will sometimes ask you specific questions about your home’s features or recent renovations to estimate its worth.
Get a comparative market analysis
Real estate agents can provide you with a comparative market analysis. This is their estimation of your home’s value based on an evaluation of your property and market trends. This is commonly done before listing a home for sale.
Use a house price index calculator
The house price index (HPI) calculator uses data from mortgage transactions over time to estimate the value of a specific house. This value is projected based on the purchase price of the home and the changing value of other homes in the area.
Hire a professional appraiser
You can hire a professional appraiser to assess the appraised value of your house.
This appraised value can be used to list the house at an accurate price, refinance your mortgage, or determine the potential financial impact of a remodel on your home equity.
Evaluate comparable properties
If you don’t want to pay an appraiser yet, you can research comparable properties in your area to estimate the fair market value of a home.
Browse sites with MLS listings to find prices for homes like yours. While researching, consider square footage, age, condition, outdoor space, amenities, and the number of bedrooms and bathrooms.
How to calculate your home’s assessed value
If you are wondering what the value of your home is and want to calculate the assessed value, you need the property’s market value and assessment rate. Then you can use this equation:
Assessed value = Market value x Assessment rate
Example: if the market value of your home is $400,000 and the assessment rate is 80%, the assessed value is $320,000.
You can also use your property tax bill and the real estate tax rate of your county to calculate the assessed value of your home with this equation:
Assessed value = Property tax bill x (100 / Tax rate)
You can typically find county property tax rates listed on their website or by calling the county department that manages taxation.
Example: If your property tax bill is $3,400 and your county’s department of finance tells you the real-estate tax rate is 1%, you can see that your assessed value is $340,000.
Benefits of knowing your home’s value
Knowing the value of a home can help homeowners plan their finances more accurately.
If you bought a home for $200,000 and its true market value is now $350,000, your equity has likely increased. You can potentially use this equity to secure a home equity loan and use it to buy a second home, fund a renovation project or consolidate debt.
Once you know the market value of your home, you can use a tool like this loan amount calculator from Discover® Home Loans to see how much money you might be able to borrow with a home equity loan.
You can also use the new value of your home to calculate cash out refinancing options. With a cash out refinance, you can rewrite your mortgage loan for a larger amount and take that amount in cash.
Assessed value vs Appraised value vs Fair market value
While your home’s assessed value, appraised value, and fair market value may be used interchangeably to evaluate how much your property is worth, they are created by different professionals and have different uses.
Here’s how to understand the differences between these home value types:
|What it means||Used for||Created by|
|Assessed value||The taxable value of your property||Generating taxes||Municipal property assessor|
|Appraised value||A professional appraiser's estimate of your property's value||Evaluating asset for loans||Professional appraiser|
|Fair market value||The likely sale price of your home||Selling the property||
Seller and/or real estate company in agreement with
Closing thoughts: The value of your home
In each case, the real value of your home is determined by the relative value of your land, your home’s features (including both interior and exterior elements), your town and neighborhood, and the value of comparable properties.
If you are not satisfied with the value assigned to your home from any of these estimates, you can typically hire a professional appraiser of your own who can help come up with an independent value.