How is a home's value determined?

Sellers sometimes expect a secret formula. There isn't one. Value comes down to what buyers have recently paid for homes like yours, and then a lot of careful comparing.

Step 1: Find the right comparable sales

The best comps check as many of these boxes as possible:

• Same subdivision or very close by. If three homes in your sub sold recently, that tells me more than thirty homes across town.
• Same style. A colonial and a ranch with the same square footage are different homes to a buyer. I compare colonials to colonials.
• Similar size and age.
• Recent. Ideally the last three to six months. In a moving market, older sales get adjusted for time.
• Actually sold. Asking prices are hopes. Sale prices are facts.

Step 2: Adjust for the differences

No two homes are identical, so each comp gets adjusted to look like yours. If a comp has an extra full bath, its price comes down a bit to match your home. If yours has a finished basement and the comp doesn't, the comp goes up. The usual adjustments:

• Square footage above ground
• Bedrooms and bathrooms, especially full baths
• Basement, and whether it's finished
• Garage size
• Lot size and setting
• Age and updates, like kitchen, baths, roof and mechanicals
• Overall condition

After adjusting, the comps usually land in a fairly tight range. That's your value.

Why online estimates miss

Automated estimates use public records and recent sales, which is a fine starting point. But they don't know you redid the kitchen, that the basement is finished, or that the house next to the comp backs to a busy road. They're often close and sometimes way off. I've seen them miss by over 20% in both directions.

What about the assessor's number?

Your tax bill shows a state equalized value (SEV), which is supposed to be about half of market value. But it's based on sales from a past period and mass appraisal, not a look at your home. Doubling it gets you a ballpark at best.

Appraisal vs. agent's opinion

When a buyer gets a mortgage, the lender orders an appraisal using the same basic method. An agent's market analysis is similar but also weighs what's on the market right now, your competition, and how buyers are reacting. A good pricing plan uses both points of view.

Try it on your home

Our instant home value works the way I just described. It looks up your home's details, finds recent sales in your subdivision or nearby of the same style, adjusts each one for size, age, beds, baths, basement, garage and lot, and gives you a value and a range. Then if you want, I'll come see the house in person and tighten it up. You can also browse recently sold homes by city to see what's been happening.