As consumers become more real-estate savvy, the general population now knows that Zillow Zestimates are not accurate. It makes sense that most people want to figure out how to find the value of their home:
- Generally speaking homes are valued on a comparison basis
In real-estate this is called the comparison approach, which is a very fancy way of say; “You compare all the homes around your home within a mile radius.
Unless you’re valuing an investment property, commercial real-estate, and/or a church, comparison approach will nearly always be used. If you’re valuing an investment property, see “income approach”. Many times people x the square footage of a house by the price per square foot of a recent sold. This can be done, but is not generally accepted by the real-estate community.
2. You need find all homes that have sold within your subdivision (or a mile radius) within the past 6 months.
This can be done in many way. If you’re a real-estate agent, you use the MLS. If you are a end-used/consumer, you use Zillow, Trulie, realtor.com, and/or ask a real-estate agent to do this for you.
3. You need to start weeding properties that aren’t within %15 of your homes square footage.
Essentially if a home is not within %15 percent UP or DOWN, of your homes square footage; it’s not a comparable so throw it out!
4. Start looking at the amount of bath and bedrooms and weed out homes that don’t have the same bed bath
Homes that are not within the same bath/bath, are not considered true comparable weeds those out as well.
5. Start looking at the architecture style
Comparing a brick ranch to a spanish revival is not accepted. Weed out homes that are not the same style.
6. Usually by the time, you’ve done all this you have 2-3 homes left. Which are true comparables, but you can stop there.
7. Lastly, judge the condition of the house.
Is the overall condition of your home poor, fair, and/or immaculate. A home in poor condition is indicative of rental abuse, such a bad tenants. Dirty carpets, poor colors, and/or an outdated kitchen/bathroom. Immaculate would be an HGTV kitchen, all new fixtures, and/or