Fair marketplace respect is different from the price for which a homeowner might be will to sell a house or the price at which a buyer might be willing to purchase a house .
How is fair market value calculated
Professionals consider factors like the size of the home, its old age and condition, the size of the property, and the region when they make their estimates. There is no matchless formula to calculate a home ‘s FMV. hera are four ways to find it :
- Go to a site like Zillow or Trulia. One quick way to find the fair market value of a home is to check online real estate sites. Both homeowners and homebuyers can use these sites to research the estimated value of a home and compare it to other houses in the neighborhood.
- Contact a local realtor to run a comparable market analysis (CMA). Real estate agents often run this report for homeowners thinking about listing their houses for sale. A CMA will show properties in the area with similar features to the home. You’ll see a range of what other homes are worth and get a better idea of where the asking price of your home should be.
- Get an appraisal. It typically costs between $300 and $400 for a home appraisal. An appraiser will go through the home to determine the interior and exterior condition and come up with what they think it is worth. Appraisals are a part of most home sales because lenders usually require them before they approve a mortgage to buy a house.
- Check the taxes. Homeowners can get a copy of the tax assessment, which can give insight into the value of the home. Many communities list this information online, typically on the local county tax assessor website. Both homeowners and homebuyers can use these sources. Online tax records may also include information about a house’s last sale price, number of square feet, and more.
Note a house ‘s bonny market respect can go up or down depending on the economy and local anesthetic house market. It ‘s important to evaluate a property ‘s value as close to the luff when you want to buy, sell or refinance a home to ensure the FMV is a accurate as possible.
Fair market value and buying a home
When you ‘re shopping for a home, it ‘s helpful to understand the fair commercialize prize of the home you are concern in buying. Comparing the fair market respect and sale price of similar homes in the community can be helpful besides. That ‘s because understanding a home ‘s FMV can help you determine whether the list price is high, depleted, or about right. It can besides help you make a successful offer when you ‘re ready to buy and know whether you ‘re getting a fair price on your dream home .
Fair market value and refinancing
The fair market value of your home can besides help you determine how much dwelling equity you have. Your home equity is calculated as the stream average marketplace prize of your dwelling minus your stream mortgage libra. here is an exemplar :
|Current fair market value of your home||$350,000|
|Current mortgage balance||$200,000|
|Estimated home equity||$150,000|
A significant amount of home fairness might allow you to refinance your mortgage for more than you presently owe and get the difference in cash with a cash out refinance. typically, you can entirely borrow a dowry of your family ‘s fairness.
Why else is fair market value important?
Fair market value is besides crucial in early fiscal transactions. Sellers and listing agents use FMV to help price a family for the current market. Outside of the sales process, a home ‘s fair market value affects the place taxes a homeowner may pay. It ‘s besides used in the policy process if you file a claim after a flood tide, fire, or other disaster or accident .
Are you ready to buy a house, refinance a house, or get cash from your dwelling ‘s equity ? We can help with all three ! Contact a Freedom Mortgage home loan adviser to learn more or call 877-220-5533 .
last reviewed and updated October 2021 by Freedom Mortgage Corporation