Hey, it's a common question. Most people feel that they know how to "value" their home. But your homes value is a difficult and ever changing number. We'll look at some of the ways you might be able to "narrow in" on what your home is worth, the pluses and minuses of each approach, and try to carve out a strategy based on your goals.
Let's start with the the different methods of finding out, from simplest to the more involved.
Town Assessment
It's right there, on your tax bill. That's the amount that the town thinks is a fair assessed value, for tax purposes. Many assessments, probably about 90%, are within 15%. But not all are, and it can be hard to know if you are in the 10% that's inaccurate. Most towns use lot size, house size, age, and a "condition" factor, stuff them all in a computer and it spits out the valuation for your house. There's more problems with how the towns calculate the rate, most of them around how old the data is, but I won't address that here. What I will point out is that since no one came to your house recently, looked at the improvements you've made, or made an assessment of your floor plan, there's simply no way for it to reflect market value. And to be fair, it's not trying to. It's trying to decide on a fair valuation to collect taxes, and that's a different goal.
Internet
Our next stop, the internet. The most popular home valuation site is Zillow. And for a while, those Z-estimates were giving Realtors like me fits on both sides of the customer relationship. But if you look right at any Z-estimate, they tell you it's a range for a property. The problem with Zillow, is it relies on data to make a determination, much like the town assessment. And so all the "subjective" and "non-quantifiable" elements are uncaptured. These can be quite basic, such as highway noise. If you can hear the highway, Zillow can't, so your estimate will be higher on Zillow than the market will likely bear. It also can't see your lot, or your floorplan. I did some preliminary research and found out that the average z-estimate was off by about 14%, with some estimates off as much as 30%. But if you have a straight forward house that hasn't had a lot of additions, in a relatively populous area and a lot that isn't really unusual, Zillow can give decent estimates. That's a lot of ifs though, so use it cautiously.
Real Estate Agents
Most real estate agents will be happy to tell you what your home is worth for free. This is likely to be your most accurate and up to date information, as most agents will look at comparables that have recently sold, and look at the existing market to judge if prices are rising or falling, or if you have features that could command a higher or lower price. To get your best estimate, you should talk to at least three, and make sure they are knowledgeable in the area that you are in. It won't do you much good to talk to a Realtor friend who's not local if you're looking for a tight estimate. Similarly, you should talk to more agents if the comparables for your home aren't that similar.
Appraisers
Appraisers tend to do a data based approach combined with the comparable search. While this is accurate, appraisers typically charge several hundred dollars to do an appraisal, so getting multiple estimates is usually not practical. Further, appraisers tend to be less concerned with what's truly marketable, and their methodology is not infallible. It is truly a point-in-time estimate of what a home is worth.
Your Own Research
I find that if I spend time with buyers and really analyze about a dozen houses, they start to develop a good "nose" for what is worth more than what. While it's likely that you'll have to look at more than a dozen homes on your own, the more you see the better you'll be able to determine on your own what your home is worth. It should be noted that it can be difficult to be objective about your own home, but you can get close. This is obviously the most time intensive approach, but has the advantage of being private.
The most common reasons that you would need to know the valuation of your home is if you are re-financing or preparing to sell. Its generally a good idea in each case to do some research on your own and develop a range that your home is in. That should be good enough for a re-fi, but if the numbers are close, you may want to talk to an agent before paying for an appraiser. If the goal is to sell, bringing in the agents after you have framed your own opinions will allow for you to have the most constructive dialog with them about how homes compare, and you'll be more invested in the strategy and marketing of your home, which is a good thing.
