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Six Ways to Figure Out What Your House Is Worth

Your house is worth only what someone else is willing to pay for it.

All other estimates and appraisals are merely educated guesses.

But in a volatile market even settling on a ballpark figure isn't always straightforward.

Nationwide, housing prices are dropping rapidly, but not equally. Home prices in Jackson, Miss., plunged almost 17% in 2007, while prices in Yakima, Wash., swelled 18%, according to the National Association of Realtors.

No prescient source can put a value on your home -- after all, many reputable sources ignored the Cassandras of the housing bubble. So the best way to get a reasonably estimate of your home's value before putting it on the market, getting home-equity lines of credit or assessing your financial situation may be to get as many guesses as possible.

In the end, you won't have captured your home's price to the nearest penny, but here are steps to get a reasonable idea of your house's worth.

1. Ask a Real-Estate Agent -- or Agents

Lauren Lindsay, a Baton Rouge, La.-based fee-only financial adviser, recommends getting at least three real estate agents to estimate the value of your home before putting it on the market.

She practices what she preaches: In 2005 she asked three agents at what price they would list her Boston home before she put it on the market. She got three wildly different answers. The highest was about $50,000 more than the lowest -- a difference of about 15% of the ultimate sale value of the house.

Lindsay priced the house at a little more than the middle estimate and sold the house within a day. She used the same strategy last June with her Baton Rouge home, with largely the same results.

2. Use an Independent Appraiser

New York Certified financial planner Cary Carbonaro knew she was getting a deal on a home in Long Island, N.Y.'s Huntington Village.

 But the appraisal required for the loan put the value of the home at only $2,000 more than the sale price of the home.

Now, less than six months later an independent assessor gauged the house's value at more than 13% above the sale price. This at a time when overall median home prices in the area dropped 3.7%, according to the Multiple Listing Service of Long Island.

Carbonaro blames the low appraisal on pressure from an overly conservative bank, skittish from being burned from earlier optimism.

Indeed, all the borrowers who now owe lenders more than their houses are worth hardly attests to bank assessors' ability to determine the value of a home.

3. Look at Comparables

There's nothing like a bit of shoe leather to give you a better idea of prices. Heading to open houses in your neighborhood gives you an idea not just of price per square foot, but of the overall condition of the house.

Houses may be in various states of disrepair, says Lindsay, and the best way to find out how yours stacks up is to see exactly what's being sold.

In a market where prices are changing quickly and homes are moving slowly, open houses may be few and far between.

4. Search Online

There's no dearth of Web sites that will give you prices of comparable homes in your area, among them,,, area multiple listing service Web sites and county government Web sites.

County Web sites may be surprisingly specific, providing information about the price, history, square footage and make-up of a house, and links to comparable houses sold in the area, says James J. Holtzman an adviser with Pittsburgh-based Legend Financial Advisors.

As long as you make sure you're making an apples-to-apples comparison, says Holtzman, they're a good resource.

But in a slow and quickly changing market, fewer home sales means fewer examples of comparable homes.

5. Investigate Changes in Area Prices

The National Association of Realtors, the Office of Federal Housing Enterprise Oversight and the Case-Shiller index all track home price. They paint home-price changes with a broad brush, taking into account home price changes in large areas, but you can get a rough idea of market housing price changes in your area.

Alternatively, you can get more local data with your area multiple listing service. But fewer home sales in an area means fewer listings, so their average home prices may change significantly with the sale of one especially expensive home.

6. See What the Market Thinks

A house worth $300,000 today may not be worth $300,000 tomorrow. In fact, many people are betting that prices will change, which may mean that your house is at risk of a (further) decline.

If you live in one of 10 major markets tracked by the S&P/Case-Shiller Home Price indices, you can look at what future contracts are selling at to see whether investors are feeling bearish or bullish about homes in your area. The market should be viewed with a grain of salt, however --it's new and relatively small.

Another option is to see how the people insuring your mortgage feel about your market. Mortgage Guaranty Insurance Corporation has a list of "restricted markets" with stricter underwriting standards.

By now you probably have a scatter plot of estimated house price points. Hopefully, they'll be concentrated around one number, and that'll be a reasonably good guess.

But when choosing among the estimates to put a price tag on your home, warns Lindsay, don't get too greedy.

She's referring to choosing a sale price for your home, but the advice holds equally true when you're looking for a home equity loan or assessing your financial situation. Underestimating the value of your home will leave you with excess equity you can tap into at some later date; overestimating it can leave you financially stretched.

Meanwhile, here's a look at current national rates for various types of home-equity loans:


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