You spent $75,000 on renovating your home but it did not fetch you the money you thought it would when you sold it. The pool you built for $50,000 may only add $20,000 more to the sale price of your home. Sounds appalling, doesn't it? Yes, the dynamics of the market value of a home are a little more complex than you thought you understood.

It's no surprise that the market value of a home is often a misunderstood concept. This happens especially when a home is evaluated by someone who is emotionally attached to it. The value they attach to their home largely influences their perception of its market value. In reality, the market value of a home is the value that the real estate market gives it. So a home is only worth how much it is valued at that point of time in the real estate market. Given these facts, it would be prudent to check for latest home design trends with a good real estate professional before going in for any modifications or renovations for your home.

A real estate agent can evaluate the market value of your home if you want to ascertain its present market value. A real estate agent gives you a CMA which is a comparative market analysis of the house. He/she does so by taking into consideration not only the various features of your house (that includes the additions and home improvements you have made to your home) but also the asking price of homes that are currently listed in your neighborhood. Thus the market value of a home is not just broadly based on your perceived value of the home as such, but on the current market prices of similar homes.

Also, as a home seller, do not make the error of listing your home for too much. This would almost certainly backfire forcing you to finally settle down for a much lower price than what your home is really worth.

So your home is worth what the real estate market says it is. No matter how hard it would seem for you, remember that the same principle holds good, when you purchase a home too, and works to your advantage.

Seek the expert advice of a good real estate professional to have a good idea about what factors go into determining a market value of a home. Often, these come in handy when you purchase a home or decide to spruce it up for sale.