The #1 Most Important Thing You Can Take as a Home Seller: Know What Your House is Worth
Understanding Your Home's Value: The Key to Smart Selling Decisions
Deciding whether or not to sell your home is one of the biggest financial decisions you’ll ever make. Before jumping into the market, it's critical to assess how selling aligns with your personal financial goals. The most important thing you can do as a prospective seller is to understand your home’s current market value. This will not only provide clarity but also set the foundation for making the right decision for your future.
Evaluate Your Options
Knowing the market value of your home can open doors to several options beyond just selling. Let’s take a closer look at how this understanding can help you:
1. Decide if Selling is the Best Move
Your home is likely one of your largest financial assets. Selling it can be a significant move, and it’s important to determine whether this is the right time for you. A market evaluation can help you decide if selling now aligns with your financial goals. By understanding what your home is worth today, you can better decide whether you should proceed with selling, or perhaps wait for better market conditions. If you hold off, you might benefit from future appreciation or other opportunities in your local market.
2. Consider Refinancing
Selling might not always be the best option if your financial needs aren't immediate. Refinancing could be a smart alternative, allowing you to reduce your monthly mortgage payments. It could also give you access to your home’s equity without selling. In today's market, with interest rates fluctuating, this option might provide a more cost-effective solution for homeowners who are comfortable staying in their current property but want to lower their financial commitments.
According to Freddie Mac, the average mortgage refinancing saved homeowners $2,800 annually in reduced payments in 2022. If you’re considering staying in your home long-term, refinancing can lead to significant savings over time .
3. Explore a Home Equity Line of Credit (HELOC)
Another alternative to selling is leveraging a Home Equity Line of Credit (HELOC). A HELOC allows you to borrow against the equity in your home for a variety of purposes, from renovations to debt consolidation, all while keeping ownership of the property.
With HELOCs becoming more popular, especially as home prices have increased over the past decade, many homeowners are using this tool to unlock their equity. In fact, as of 2023, approximately 15% of U.S. homeowners have utilized a HELOC at some point . This can be an attractive option if you need funds but don’t want to give up your home, particularly in a market where home values continue to rise.
Two Quick Ways to Understand Your Home’s Value
If you’ve been weighing your options and want a clearer picture of your home’s worth, there are two approaches to help you understand the market:
1. Comparative Market Analysis (CMA): When You Need to Make a Decision Soon (< 6 Months)
If you’re thinking of selling within the next six months, a Comparative Market Analysis (CMA) is your best tool. A CMA is an in-depth evaluation of recently sold homes in your area that are similar to yours. It will provide an accurate estimate of what your home could sell for in the current market, allowing you to plan your next steps with confidence.
With housing inventory levels fluctuating and buyer demand shifting, knowing the market value today is vital. Recent data from the National Association of Realtors shows that homes priced accurately according to their market value sell 83% faster than those priced too high . Getting a CMA could help you avoid costly delays or missing out on opportunities due to mispricing.
2. Homebeat: When You Have More Time (6+ Months)
If selling is a longer-term goal, Homebeat can keep you informed about the value of your home over time. This service sends you monthly updates, tracking changes in your neighborhood’s comparable home sales. That way, when the time does come to sell, you’ll have an up-to-date understanding of how your home fits into the market.
Having access to regular updates on your home’s value can make you more confident when you decide to sell. Zillow data suggests that homeowners who consistently monitor their home’s value are 33% more likely to sell at the optimal time .
The Bottom Line: Know Your Home's Worth Before Making a Move
Understanding your home’s value is the crucial first step in making any real estate decision. Whether you choose to sell, refinance, or explore other financial options like a HELOC, having the right data will guide you toward the best decision for your financial future.
Need more personalized insights? Get a free Comparative Market Analysis (CMA) to discover the current market value of your home or sign up for Homebeat to track your home’s value over time. We’re here to help you make the best move for your unique situation.