A home value estimate is arrived at by using the same process that appraisers use when appraising a home, with the additional input of a realtor’s knowledge and expertise in a given market. Here’s how it works.
First, your Realtor will collect the tax information on your home and verify the square footage, number of bedrooms & bathrooms, outdoor living areas, and any other information pertinent to your property.
She will then research properties located close to yours that have sold recently and most closely match your property. The preparation of this Comparative Market Analysis will examine three of the similar sold properties, making adjustments to the comparables so that they more closely match your house. For example, if you have a patio but the sold house does not, an adjustment will be made to the value of that comparable that adds the value of a patio to it. If the sold house has a feature your house doesn’t have, the adjustment would reduce the value of the comparable by the value of that feature. The values applied are the same values used by appraisers in your area. The adjusted values of the three sold properties will provide a price range for your home value estimate.
Next, your Realtor will review the homes in your area that are currently on the market for sale, and assess how your home will stack up against the competition. An experienced Realtor will know what buyers in your area are looking for and which features carry a premium, and she’ll also have her finger on the pulse of how much demand there is for a home like yours. She will then use that knowledge to adjust the price recommendation of the Comparative Market Analysis accordingly.
The biggest mistake sellers make is over pricing a home, but obviously no one wants to under price it either. Figuring out the right price for selling your home is a combination of the math used by appraisers, and the expertise and knowledge of your Realtor. This is how to determine your home value estimate.