<p>I'm working on filling the American University Institutional Financial Aid Form and it asks for: "Value of the home", and it also says "If the parent(s) owns a home, the value of the home should be the current market value of that home. For example, if the home is assessed at $100,000 for tax purposes, but would actually be sold for $120,000, please report $120,000. The current debt against the home may include: (a) deeds of trust/mortgages; (b) home equity loans; and (c) used portions of home equity lines."</p>
<p>How do I/my parents determine the market value of our home? The tax value seems to be pretty inflated my dad says, but my dad is also the type of person who would be OVERLY conservative on the value (and I don't want to get in trouble). Any suggestions for determining the market value?</p>
<p>Well....in most places the tax value is actually LESS than the market value. One way to guestimate the value of your home is to look at recent home sales in your neighborhood of similar homes. This is a matter of public record at your town hall (or wherever they keep these records). You may also find these types of listings in the mail. You could use Zillow.com for a rough estimate by putting your address into the site. But that would be an estimate only.</p>
<p>Our tax value is supposed to equal market. And it has been very close in past years. However with the prices on houses dropping (if they are selling at all) it is no longer valid. You could ask a realtor or mortgage broker to give you their professional opinion, but that still only an opinion.</p>
<p>If you read the book, Paying for College Without Going Broke, they address this issue nicely. They recommend listing the price you could sell your house for immediately if you needed to sell it today, not have it on the market for 6 weeks etc. They also recommend subracting from the price what you would pay a real estate agent to sell your home plus and upgrades you would need to do to enhance the sale</p>
<p>It's quite conservative, but since it's federally sponsored, I don't think it could get you in trouble. Whatever you do, don't feel compelled to use Zillow or similar cites, which probably tend to overstate value in such a volatile real estate market.</p>
<p>I second the recommendation for the book in Momof2's post.</p>
<p>It does come close to what I got when using the formula in the book you mentioned. With a 25 year old house we know we would have to pay for several upgrades.</p>
<p>Thanks to both of you for sharing this info.</p>
<p>You're welcome. I was a little concerned at first about how conservative it is, but gave up any qualms when the very inflated housing market in my area started to weaken. Plus, transaction costs can be significant, as the book suggests. I actually noted in the explanations section of CSS how I arrived at the value, just to be totally upfront about it.</p>
<p>I used the calculator for my parent's house, and it seems to be off pretty significantly (tens of thousands of dollars) from what real estate agents have appraised it at as well as the tax assessed value. The real estate market here is also pretty bad, which means it'd likely be on the market for months.</p>
<p>My neighbor's house sold a couple months before I was filling out the CSS Profile. Her house is a bit bigger, but our lot is a bit bigger... they are both about 60 years old, and pretty similar in most respects. I'm pretty sure mine would have sold for about the same at that time. (Maybe somewhat less now, with the bad real estate market.)</p>
<p>Anyway, I just used that number, what her house sold for. It was far above the ridiculously low federal housing index number, but not as high as the very fanciful and inflated Zillow number.</p>
<p>Maybe your Dad should just be conservative, but still honest about it. I have read they don't look too favorably on obvious low-ballers. Anyway, some schools cap how much equity is factored into your aid award anyway, so trying to value your home as low as credulity can bear may be just a lot of caginess for no productive reason.</p>