From the outside looking in, the housing market can feel like watching a mystery-thriller—full of twists, turns, and unexpected outcomes. And if you're interested in jumping into that market, you might be scratching your head and wondering what your home is actually worth. If you decide to sell, what will a buyer be willing to pay? There are multiple ways to determine your home's value, and all of them serve different purposes.

Before we dive in, if you want to see what your home is worth right now, check out our home valuation tool! It's totally free and can give you three estimates of your home's value instantly.

Now, let's get started by going over the three main types of valuation:

Appraised Value

Appraised value is what lenders use when a borrower applies for a loan or refinances their mortgage. To calculate it, a licensed appraiser looks at the location, size, and condition of the home, plus any renovations that have been done.

Assessed Value

Assessed value is used by local county tax assessors to determine property taxes. It's calculated based on various factors, including whether or not income is generated from the property. Assessed value is usually lower than fair market value and isn't intended to represent how much a property could sell for.

Fair Market Value

Fair market value is the starting point for a listing price and is based on what buyers in your market are willing to pay for your home. That amount is informed by what similar properties in the area have sold for. These properties are called comparables or "comps."

Your real estate agent will assess your home's fair market value by using comps to do a Comparative Market Analysis (CMA). When looking for comparable homes, agents typically use four key factors:

Recency

Because the real estate market experiences natural fluctuations, your agent will stick to homes that have sold recently—the more recent, the better. That will help give a better estimate of what your home could sell for in the current market. A similar home that sold even five years ago was selling in a very different market.

Feature Similarity

Comps don't have to be EXACTLY the same as your home, but ideally, they should be a similar type (ranch, two-story, etc.), have close to the same square footage, feature around the same number of bedrooms and bathrooms, and were built at around the same time.

Distance

In a perfect world, comps should be from the same neighborhood as your home. That's not to say that a home farther away can't be a good comp, but location-based differences like school districts and homeowner associations can also affect what houses sell for.

Location

This is less about what neighborhood your home is in and more about any special features that your area might offer. For example, if your home is waterfront or next to a golf course, your agent will use comps that are nearby those features as well.

When preparing a CMA, agents often pull data from the local Multiple Listing Service (MLS)—a database of properties that are either listed for sale or have a sale pending. They may also use homes that they've recently listed or sold.

Calculating fair market value isn't an exact science, and it's not as in-depth as other types of valuation, so it's generally used as a jumping-off point for a listing price. And there are many additional factors that can influence how much your home will sell for, like the home's condition and any renovations that you've done.

The good news is that an experienced agent from Better Homes and Gardens The Masiello Group will bring a well-trained eye to your home's Comparative Market Analysis—researching, evaluating, and calculating the best possible listing price estimate for your home.

And if you just can't wait for one of our agents to do a CMA, don't forget about our home valuation tool. It's 100% free and will provide you with three estimates of your home's value.

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The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more.

Our agents are eager and excited to meet your real estate needs!

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.