The real estate market today is constantly evolving and changing. Lately, not only has credit become more strict and the guidelines for obtaining a mortgage loan even more stringent, but now homeowners also need to be aware of changes in the way their home’s value will be determined. For example, we’re all aware that home values have declined in many areas throughout the country, but what many don’t realize is that lenders have begun assessing the home’s future value (or rather how much that home will be worth in a few months or years) in addition to it’s current value. So if you are interested in knowing how much your home is worth, here are some of the new factors lenders have begun to scrutinize when determining home value.

1. The Appraisal: Getting your home appraised by a certified professional has and will always be important when finding your home’s value. However with the changes in the housing market, don’t be surprised if the appraiser spends extra time in your home to make sure their appraisal is as accurate as possible.

2. Price Reductions: Lenders will also look at home’s in your area that are on the market that have been reduced in price. If many of the home’s on the market in your area have had a price reduction, the lender might determine that your home is in a market that is declining in overall value and may decide to lend you less money.

3. Time on the Market: Lenders are also likely to take a look at how long comps in your area remain on the market before the closing of the sale. The faster homes in your area sell, the better the market, so if home’s in your area have been on the market for a while, it could decrease the value of your home

4. Comparisons of Sales Transactions: Often, lenders will run comparisons on the number of sales transactions that were completed in your area in the last few months, the last year and currently in order to predict future market values. For instance, your home’s value may be considered lower if last year, 10 homes in your area sold within a month, while only a couple have sold within recent months of the current year. The result of this process is subjective and can differ from lender to lender.

5. Default and Foreclosure Numbers: Due to the current housing market, default and foreclosure numbers are playing a larger role in determining a home’s value. Lenders are looking closer at how many of the homes in your area have received a notice of default (the result of not paying your mortgage) as well as the number of homes that are in foreclosure. Either of these numbers will have a negative impact on your home’s true value.