<p>I was told that the house value should be BEFORE costs of sale.</p>
<p>In a seminar I attended, they advised us that home value is what you can sell it for immediately, not after 6 months on the market. In the declining real estate market that can make a big difference, for us likely 100, 000 dollars less in equity</p>
<p>
[quote]
Financial aid applications want the market value of your home if you had to sell it on the day you file.
[/quote]
This is why I say it's important to talk to the college. My daughter's college uses the federal housing index to calculate value -- so it doesn't matter what Zillow.com says, it matters what the purchase price was the year that the house was bought. The advantage of the federal index is that it smooths out geographical differences -- it tends to hurt those who live in areas where the market has been flat, but benefits those living in coastal or urban areas where the market has skyrocketed. But the bottom line is it is looking at what the parents actually paid when they made the decision to invest in a home. There is a federal index calculator here:
<a href="http://www.finaid.org/calculators/federalhousing.phtml%5B/url%5D">http://www.finaid.org/calculators/federalhousing.phtml</a></p>
<p>You cannot assume that a college uses this index -- but this is an example of why the answer as to how to calculate market value is not as easy as you would think.</p>