How to Compare House Prices to Nail Down Your Home’s Value

2. Perform a comparative market analysis (CMA)

“You have to compare apples to apples. So if I’m looking at a single-level property, I make sure that the other homes that are in my comparative market analysis are also single-level,” says Mary Jo Santistevan, a top-performing real estate agent in Phoenix, Arizona.

An AVM is a good starting point, but a CMA is a much more comprehensive analysis that can amount to 30+ pages of data. A CMA can also incorporate information not found in the data scanned by AVMs, such as whether the home has been recently upgraded. When you’re choosing which properties to use for comparison, you’ll want to choose properties that are similar in:

• The number of bedrooms (if an exact match isn’t possible, choose a home that has one more or one less bedroom)
• The number of bathrooms
• Square footage of the interior, as well as similar lot size (“Home appraisers usually stay with 10% to 20% [when comparing other homes to yours],” says Santistevan.)
• Year the home was built (choose homes within a five-year range to find homes most similar to yours)
• Condition (maintenance of the functional systems and overall condition of the home)
• Updates (modern kitchen upgrades, central air, recessed lighting, type of flooring, etc.)
• Structure and style (split-level, versus two-story, versus ranch)

Note: Properties with added amenities or cosmetic updates can be used in your comparison, but be mindful that you’ll need to adjust the price accordingly.

3. Stay in the neighborhood

The properties you want to use when you compare home prices should be within the same neighborhood — the closer the comps are to you, the better. “If you go across a busy street, a set of railroad tracks, a creek — everything can change,” says Carl Medford, a top-selling real estate agent in Fremont, California.

You can use online marketplaces to search for homes that have sold recently. To do this, follow these steps:

• Type in your city or address to get more specific results.
• Use the filters to adjust the results to:
  • Recently sold listings only
  • Your home’s specifications
  • Choose “sold in last six months”

As you’re reviewing the sold listings, look at properties similar to yours and what’s nearby, too. Ideally, the comps you’re using should be within the same proximity to shopping, restaurants, schools, hospitals, public transportation, etc.

Unfortunately, you will also need to consider external factors when analyzing comps. For example, property values can decrease if:

• They’re near loud facilities (airports, busy roads, train tracks, military bases).
• They’re near safety threats (toxic waste facilities, shooting ranges, registered offenders).
• The school district is less than desirable.
• There are negative billboards or storefronts nearby.
• The neighbors are noisy, disruptive, or their property is in bad shape.

4. Keep track of trends

Local real estate market trends are constantly changing, and when you’re selling, you have to stay up to date with the comparable homes in your area. Market factors you need to be aware of include:

5. Hire a real estate agent

Learning how to compare house prices can take experience, but it can be overwhelming if you’re in a saturated market and homes are selling faster than hotcakes. There’s so much data to review, analyze, and track! Fortunately, when you’re working with a real estate agent, they do everything for you. The agent you hire should know the market like the back of their hand, and finding comps is second nature. They know how to compare house prices, and they can recommend a listing price that is competitive and accurate.

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