The first question on anyone’s mind when they are looking to purchase a home is how much money they might spend on the purchase. Likewise, when a homeowner is seeking to sell a home, knowing how much that home is worth will guide the pricing process. Home value also impacts issues such as taxes, so it’s important for a homeowner to have a recent appraisal of the home.

A home appraisal may be done by a professional at a certain point, but for the homeowner’s peace of mind and to ensure that a homeowner might be getting the right information during the appraisal, engaging in a self-appraisal of the property offers valuable information. The following general projects will help a home owner begin an accurate home appraisal.

1. Research similar properties

A home’s value will usually depend on the current market values of similar properties in the area. Although home condition and view might also enter into the number, getting an idea for similar home values in the area offers a jumping-off-point for appraisal research. It’s vital to realize that it’s not the active sales prices that should be investigated, but the amount of money cited as the final sale price. The asking price for a home is often a little higher than its actual appraised value.

2. Consider market conditions

When listings for a lot of houses are flooding the market and sales levels are low, the value of those homes usually sinks. Conversely, when the market is hot, and homes don’t remain on the market for very long, the value of those residences increases. If there is low inventory of homes for sale and high demand for listings, a home’s value will increase. For example, recent data suggests that new housing starts and completed sales in many northern California locations increased for the first quarter in 2013 versus similar data a year prior.

3. Investigate new property prices

One of the considerations for buyers may be whether to purchase a brand new home or whether to consider existing construction. Although it takes some research and number crunching, a homeowner should figure out the actual price of replacing his home with new construction. A homeowner will want to figure out how much it would cost to construct a similar yet completely new home on the same property where his current home stands.

4. Look at replacement needs

Once the research regarding similar homes in the area has been conducted, a home owner will then need to consider the condition of his home. Everything from the floors to the roof needs to be examined to determine whether certain areas of the home require replacement. A home in great condition with thirty-year-old appliances, dated fixtures, and a water heater that needs to be replaced will offer less value than a home with nice, new stainless steel appliances and updated hardware throughout the house.

5. Consider necessary upgrades

Sometimes a system in the home is just old and out-of-date. Other systems might actually be faulty to the point where replacement would be required in the event of a sale. For example, a leaky roof that was decades old might need to be replaced, and would eat into the value of the home. On the other hand, a roof that was just sporting a few missing tiles and needed a little TLC probably wouldn’t impact the value of the home as dramatically.

The appraised value of a home, when determined by the homeowner, will only be an estimate, but the number may hold value when the homeowner seeks to sell the residence. Understanding the appraisal value of the residence may also influence whether a family will have the means to move into a different home once a present residence is sold.