If you're thinking about selling your house, you probably have an idea of what price you would like to get for it. Would an appraiser agree with your price tag? Could your estimate be low? High? Ultimately, your home is worth whatever a buyer would pay for it. The best way to determine that price is through a real estate agent or an appraiser. Let's take a look at the Home Price Perception Index to see how homeowner pricing compares to estimates from professionals.
The Home Price Perception Index (HPPI) was developed by Quicken Loans to compare the amount a homeowner perceives their house is worth vs. the value determined by a professional appraiser. 2019 homeowner perception of home prices is more inline with appraiser values, unlike their perception from 10 years ago. For example, a homeowner in 2010 valued their home at $180,000 while an appraiser only valued it at $165,000. According to recent reports from HPPI, a homeowner's perceived value compares closely with that of a professional appraiser, varying by as little as a few thousand dollars in many regions.
Where you live in the U.S. impacts the perception of home values and it varies year to year, sometimes month to month. Regionally, the highest home appraisals are centered in the West and Midwest including some on the East coast, leaving homeowners with more home equity. Specifically, homes in Boston, Charlotte, Seattle, San Francisco, and Minneapolis are appraising higher than homeowner expectations. On the other hand, Detroit, Chicago, Cleveland, Tampa and New York are seeing appraisals below homeowner expectations.
To get a better idea of what your home is worth, and to be more inline with appraiser home value estimates, take advantage of online valuation tools. You might start with the Federal Housing Finance Agency's House Price Calculator (HIP). You can also look at well-known, national websites that provide estimates of your home's value, but it's recommended that you use them simply as a starting point. More importantly, look at public records including property transfers, deeds of ownership, tax assessments, etc., to get a clearer idea of what your home's worth.
If you want to get the most accurate estimate of your home's value, consider talking to a real estate agent or an appraiser. A real estate agent will compile a Comparative Market Analysis (CMA), providing prices on homes recently sold in your neighborhood. Information on sold values is imperative in determining the sales price of your home, and this information is only available to real estate agents and those who are associated with your local MLS. A professional appraiser can provide the most insight on the value of your home. An appraiser will look at the market, specifics about your property, depreciation, how your home compares to other homes that have sold in the area, vacant homes, homes currently for sale, sold prices, and other factors. Working with a real estate agent or an appraiser, will provide you with the most accurate sales price for your home.
When it comes to evaluating the cost of your home, your perception of the value may differ greatly from that of a professional. To avoid disappointment when determining a value for your home, consider contacting a real estate agent or a professional appraiser. If you don't seek professional advice, you'll need to closely watch home sales in your neighborhood and look at public records to determine a fair price for your home. Whether you list your home on your own or with a real estate agent, knowing the true value will provide you with the best opportunity to sell quickly and at a price buyers are willing to pay.
Extensive home selling information is available in our Home Seller's Bible.