With such low-interest rates on mortgages, it's no wonder why people are rushing to secure a home right now. Combined with the extremely low inventory on the market right now, we're seeing something
Using Comparables to Find Your Home’s Value
Dated: December 3 2020
Working out what a property is worth can be challenging and, speaking from experience, it's more of an art than a science.
A few factors go into coming up with the exact value of your home, and those factors can fluctuate greatly.
The best way to determine the value of your home is by using comparables. Start by finding 3 homes that were sold in your area in the past 3 months (ideally, but 6 months is acceptable).
You should also be sure that the houses are comparable to yours -- they were built in approximately the same year, the square footage is a close match, and they are the same style. You can easily get off-track if you've been comparing your ranch to a bungalow -- don't make that mistake!
Ensure that the homes you're comparing to are in the same neighborhood as your own, or in one where house size and other factors are of similar value. You don't want to pull data from homes that are similar in every respect, except that one is in a nicer part of town than the other -- it will skew your numbers poorly.
On that note, keep an eye on the state of repair that your comparable homes were in when they sold. It'll be essential to determine this because, ultimately, your goal is to assess your ARV, or "After Repair Value." Look for homes that required a similar amount of work to your own when they sold.
Once you've found three comparables, you'll see that it’s hard to find a house that doesn’t differ in at least one way, and you'll have to adjust for that. For example, if one of your comparables has a pool and the others do not, factor that into your calculation.
Averaging your adjusted sale prices, you can start to calculate your "ARV," the value of your home after it's been fixed up. This plus a market analysis will help you price your home to sell, as well as get you the most value possible.
Now, you might be asking at this point, "How do I come up with all this data?"
The answer is: you can talk to a real estate agent. Many will tell you what they know about the value of a home, and they'll even share their data with you. This will be most effective if you've done your research and have your own idea of what the home is worth, but either way, you can still use this method.
You could also go to Zillow and generate a Zestimate. However, be warned, Zestimates are very general, “rough estimates,” and I only recommend using them to approximate value.
Finally, I have another option that may help. I have developed a tool on my website that provides free comparables. Just click here, and you'll be taken right to it. Furthermore, my consultations are free, and I am happy to discuss your home's value with you.
In my 29+ years of experience, I have helped hundreds of families buy and sell their homes. My business goal has always been to obtain the most value for my clients in the shortest possible ....