How to Determine the Market Value of a Property
Determining the market value of a home is necessary prior to listing the property for sale. Two common approaches are the market value and sales comparison methods. Market value bases a home's value on the characteristics of the home and its surrounding environment. Sales comparison is a particular method used by Realtors. Real estate agents have specific knowledge on homes sales in the market and how well homes sell with certain features.
Other People Are Reading
Instructions
-
Market Value Method
-
1
Measure your home's internal features. For example, count the number of rooms, bedrooms, bathrooms and special features, such as crown molding, decks or wood flooring.
-
2
Determine the curb appeal of the home. This includes elements such as the landscaping, neighborhood, lot size and sidewalks.
-
-
3
Calculate the square footage of the home. The best way to do this is to contact the local city or county records office, and request the information for the home.
-
4
Review a list of homes for sale with the same or similar features of the house. This presents a baseline for the price a buyer may be willing to pay for the home.
Sales Comparison Method
-
5
Contact a local real estate sales agent. Request that the agent conduct a sales comparison on the home.
-
6
List the number of comparables for the real estate agent. Similar to the market value method, this is the number of rooms, bedrooms, bathrooms, features, home's age and if any major items---such as heating, ventilating and air conditioning (HVAC)---are original or updated.
-
7
Review the list of comparable homes. The real estate agent provides a list of homes sold with similar features. This represents the price paid by buyers for homes.
-
1
Tips & Warnings
The sales comparison approach is generally more preferred when estimating a home's value. This shows the price paid rather than a belief of the price a buyer is willing to pay.
