How Much Is Your Home Worth Today?

The problem is, most homeowners really don’t know.

They’re aware that their home has almost certainly lost value since the peak of the market in 2005, but just how much? Do they have enough home equity to be able to qualify for a refinance or obtain a home equity loan or line of credit?

Of course, when you apply for a refinance or home equity loan, the lender will order an appraisal to determine what the home is worth. But that costs money, of course – typically several hundred dollars – and most homeowners would like to have a good idea of whether or not they can qualify before applying for a new loan.

So how can you figure out how much your home is worth without ordering a formal appraisal?

The simple fact is, you can’t – at least, not with 100 percent accuracy. Even well-qualified, professional appraisals are expected to differ by as much as 5 percent when appraising the same house – which translates to a $10,000 difference on a $200,000 home.

That said, there are ways to obtain a “ballpark” figure for your home value that can give you a better idea of whether or not it’s worth pursuing a new home loan. If your ballpark figure is reasonably close to what you need to qualify, you can decide if you want to pursue things further. If it’s completely off the mark – well, you’ve saved yourself some time, aggravation and money.

There are a number of “home value estimators” available online that allow you to plug in your home address and immediately get a free estimate of what your home is worth. Some include recent sales prices for nearby properties as well. Zillow, Chase, Yahoo, the Federal Housing Finance Agency and a number of others all offer different variations of these.

The problem is that these can produce widely varying results. Some only provide a broad range of possible values, rather than a specific price. So you really can’t be sure you’re getting an accurate estimate from any one in particular.

You can try to match up actual prices from recent sales to see which does the best job of estimating prices in your neighborhood. Just be aware that some of those sales will likely be from foreclosures, which tend to sell for considerably less than what the home might bring in an arm’s length transaction.

Another method is simply to contact your real estate agent who sold you the home. He or she likely has a pretty good sense of where the market stands these days and should be able to give you a pretty good estimate of what your home ought to appraise for. They’re usually willing to help, because they want you to come back to them the next time you’re shopping for a home.

On the other hand, some real estate agents may be reluctant to admit just how much value your home has lost since you bought it, and may give you an estimate that’s on the high side. In addition, many agents have gotten out of the business with the collapse of the housing market, so your agent may no longer be available.

The most accurate way to obtain an appraisal estimate is to do it like the pros do – by analyzing comparable sales. Although few homeowners have the knowledge and skills the pros do to make a full evaluation, you can come up with a reasonable estimate by comparing prices yourself.

What you want to do is look up sales information on homes that were recently sold in your community and try to identify which ones were previously sold around the same time you bought yours. You should be able to get this information through your city, town or township assessor’s office, often online.

Look for ones where the previous sales price was in the same broad range as what you paid for yours, and see how much those prices have changed. Again, look for arm’s length transactions rather than foreclosures. Try to identify about 10 of these – the average decline in values among them should give you a pretty good idea of where your home value stands.

Again, these methods will only give you a ballpark estimate of what your current home value is and may be considerably higher or lower than what a professional assessor may come up with. Be aware, too, that assessors tend to be fairly conservative in their appraisals these days, so keep that in mind as well.

But you should end up with a reasonably good idea of what your home is actually worth and whether you are a candidate for a refinance, home equity loan or line of credit.