The guide to understanding your home value and what it means for your home's sale price

Are you planning to sell your house, looking for refinancing or buying a new homeowners insurance policy- are trying to figure out how much your home is worth? Your home may be your castle, your personal feeling towards the property and even how much you paid for it a few years ago play no part in the value of your home today.

A home value is based on the amount the property would likely sell for if it went on the market, estimate of what a buyer would be willing to pay at that point in time. Other things that could influence value are number of bedrooms, if the kitchen is updated, the time of year you list the home and how many similar houses are on the market. The amount changes as the months go by, more homes sell and the property ages. Here’s the breakdown of home values and how you can determine how much your house is worth.

While determining a home's value buyers place no value on the good times you've spent there and might not consider your updated bathroom or in-ground swimming pool to be worth the same amount you paid for the upgrades a couple years ago. Especially, the financial backing in a deal selects the property’s value, and it’s most often a bank or other nonbank mortgage lender making the call. Property valuation depends upon the recent sales in an area, property values for a living compare all the details that make your house similar and different from those recent sales, and then calculate the value from there. Determining a proper value could be more difficult.

The individual, group or tool appraising the property may also influence the outcome of the appraisal. The common appraisal scenarios include: The lender your buyer has chosen will hire an appraiser to complete a report on the property, which include all the details of the house and its history, with the details of similar real estate deals that have happened in the last six months. Especially if you’re struggling to agree with your real estate agent about what the most likely sale price will be, bringing in a third party could provide additional context. But in this scenario, be prepared for the agent to be right. Many real estate websites offer information more informal home appraisal tools that give you an approximate value for your home. But online value estimator will just pull information that is online and may not have all the facts that a professional appraiser would utilize in a valuation report.

Your home’s value is also determined for annual property taxes. In addition to examining the sale prices of similar houses sold recently, the tax assessor also looks at what the cost would be to build a similar house, whether you’ve made any recent improvements, if you earn income from the property in any way and the cost of upkeep.

A property’s assessed value for tax purposes is often less than the appraised value – and that’s a good thing. The property taxes you pay annually are based on the assessed value, so the higher it is, the more you owe the government.

For homeowners looking to prepare their home for sale, just keep in mind that wider home value trends and reports have little impact on you. Keep a close eye on hyperlocal reports; those that provide monthly or quarterly trends on your specific ZIP code can be a better reflection of what’s happening to your property.

O'Connor & Associates has been active in reducing property taxes, providing expert witness testimony and appraising commercial real estate property