The value of a house plays an important role in several scenarios. For instance, if you plan to sell off your house, you should have a concrete idea about how much it’s worth in the first place. Similarly, if you plan to refinance your mortgage or purchase a homeowner’s insurance policy, having an idea about the value of your property could help you in making an informed decision.

Finding the value of your property is not as simple as you might think. The value is not determined by what a buyer is willing to pay for it. Ultimately, it is the financial backing that plays an important role in determining the value of a property. Here are a few common ways to appraise the property value.

Lender Appraisals

The appraisal is usually done once the property is under contract in case of a sale. The lender hires an independent appraiser who visits the property and compiles a report on their findings. The report doesn’t just focus on the house itself and its past, but it also analyzes similar deals held in the area over a period of six to twelve months.

Personal Appraisals

You can also hire an appraiser to value the property. If you have decided to sell your house but don’t know an accurate price to quote, hiring an appraiser is an excellent idea. This is ideal when you are unable to agree with your real estate agent on a value.

A formal appraisal usually costs less than $500, so it’s a worthwhile investment if you plan on getting the maximum value from your property.

Online Estimators

There are a number of online estimators that you can use to appraise the value of your property as well. Obviously, these are not as accurate, but they will give you a rough estimate of what your house is worth. Zillow’s Zestimate, for instance, is a commonly used tool to appraise the value of a property.

Tax Assessor

Tax assessors look at the costs of building a house similar to yours, and also factor in any upgrades or improvements you might have done recently before appraising the property.