The value, or worth, of your home is the amount for which you could sell it today on the open market to a willing buyer in a fair transaction. There are many factors that determine how much someone would pay for your home, but, in general, a buyer will pay approximately the same amount for which similar homes are selling in the area. Homes that have recently sold that are similar to yours are known as “comps,” or comparables. You can use information about these comps to estimate your home’s worth.
Gather the sales price, square footage and other information about homes that have recently sold in your neighborhood. You can get this information from websites that provide recent sales data, or from a real estate agent who sells homes in your neighborhood.Step 2
Select from your findings at least four homes that are most like yours and that have sold most recently to use as comps. These homes should be similar in age, have the same number of bedrooms and bathrooms and should be about the same size. For example, assume your home is 3,500 square feet and two stories. A 3,700 square-foot two-story home on your street that sold last month would make a good comp; a 1,500 square-foot single-story home that sold 9 months ago would not.Step 3
Divide each comp’s sales price by its square feet to figure its cost per square foot. In this example, assume a 3,700 square-foot comp sold for $800,000. Divide $800,000 by 3,700 to get $216.22 per square foot. Assume the other comps’ costs per square foot are $180, $205.50 and $282.Step 4
Cross off your list the comps with the highest and lowest cost per square foot to exclude any potential outliers in your estimate. In this example, cross off the comps that sold for $180 and $282 per square foot.Step 5
Add together the cost per square foot of your remaining comps. Continuing the example, add $216.22 and $205.50 to get $421.72.Step 6
Divide your result by the number of remaining comps to determine the average cost per square foot. In this example, divide $421.72 by 2 to get $210.86.Step 7
Multiply your result by your home’s square footage to estimate its value. Concluding the example, multiply $210.86 by 3,500 to get an approximate value of $738,010.
- Sold Home For Sale Sign in Front of New House. image by Andy Dean from Fotolia.com