You can do your own home appraisal using the same methods used by professional appraisers to come up with the value of real estate properties. If you have a single family home, there are two common methods you can use. These are either using replacement cost analysis or using comparable sales. If you have income properties, you can use a different method that is based on capitalization.
When you are using replacement cost, you should ask yourself, “how much will it cost me to buy this land and build a house on it?” Let’s say for example that the land would cost $30,000, and the house could cost $120,000 to build, the total value indicated would be $150,000 if the house is still new. If it has depreciated by 10 percent, you should subtract $12,000.
Replacement cost is not used widely as it’s not very useful in measurement. For example, it would be difficult to estimate the cost of the land in a city area where there is no more land left for sale. Moreover, it is also difficult to measure the depreciation. The method is used for unique homes that cannot be compared with others easily. The primary way of appraisal used for property is using comparable sales.
To get an idea on what your house should cost on average, you have to compare it to other similar houses that have been sold in the surrounding neighborhood. It is recommended you find at least three houses that were similar in make. This means they had the same number of bathrooms, fireplaces, dinner rooms, etc as your house. The house should have been sold within the past six months. You can obtain this information from county records or real estate agents who have access to multiple listing services (MLS).
To save yourself all the trouble of doing the research and calculations on your house, you can hire a professional appraiser to help evaluate the value of your house. Appraisers are listed in real estate journals in your area. Apart from the print media, they are also listed online in websites such as RealEstateAppraisersList.com. This site lists appraisers from all over the country, and you will also find it useful if you need resources on the process of home appraisal.