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It's been a number of years since you bought your house and you now wish to discover the "equity" in your home. Equity is the difference between the current value less any amount left owing on the mortgage.

So first you need to work out the current value. There are three steps you should take to work out your house's value.

First assess what you have. Is it a free standing house, a detached/semi-detached unit or an apartment? How old is it?

What is the interior like? How many bedrooms are there? Is the bathroom and kitchen modern or renovated? How many other rooms do you have, are they open plan? Have you recently redecorated or done any renovations?

Now for the outside. What size is your block of land? Do you have a pool, sheds and/or workshops? Is there a lockable garage for one or two cars? Do you have security doors and windows and have the gardens been well kept?

Overall what condition is the house in? If you are living in a "renovator's delight" you should expect that to make a significant difference when determining your house's value.

Also of relevance is the location of your home. Is it in a sought after area close to major cities or are you the outskirts of town with lots of subsidized rentals nearby?

Are shops, schools and public transport in convenient walking distance from your house?

After assessment it's time to "compare". Turn to the property section in your local newspapers and collect "properties for sale" booklets from local real estate agents. You can also use the Internet if you like, but I have found you get a more thorough and easier to look at overview via the old-fashioned way.

Look through all the houses for sale in your area, paying close attention to the ones that have descriptions the same or similar to yours. By observing the prices of these houses you should get a rough idea of what your house is worth. If there aren't very many listings keep checking for a few weeks until you are confident of what you think your houses value should be.

That's your homework done, yo are now qualified to get a second opinion (or two or three) from a real estate agent.

I believe it is always important to do some research before calling a professional for anything. This way you have a good knowledge of the subject and are in a position to ask more intelligent questions. Plus if the professional realizes you know what you want they are less likely to deceive you (I'm sorry to be cynical, but it does happen in the financial world and the best way to protect yourself is to gather as much knowledge as you can before you seek advice).

Choose a real estate agent that operates in your area because they will have the most knowledge and experience of your local house values.

The real estate agent will have done the same research as you with one difference. They have access to information of sale prices of houses sold in your area over a number of years. They use this information combined with the location and type of house you have to determine your house's value. A real estate agent will also advise you of any improvements you could do to increase the value of your house.

Remember, the number you come up with and the value the real estate agent gives you are only estimates of "approximate value". As any real estate agent will agree, the only sure-fire way of finding out the exact value of your house is to actually put it on the market and see what you get for it.

Learn more about this author, Blonde Rose.
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