Determining Market Value is a job for Realtors
The value of a home is determined by it's "Market Value". Market Value is defined as the
price a willing seller will accept and a willing buyer will pay for a property that has been exposed to the market for a reasonable length of time.
To determine Market Value you look at similar homes in the same area that have sold recently (preferably within the last 6 months). These are called "comparable sales." These are homes that compare closely to the one you want to purchase. They should be similar in square footage, number of bedrooms and bathrooms, garage space, lot size, and type of construction.
Finding comparable sales is easier if the home is part of a tract of homes where you are most likely to find the same models to compare against one another. If it is not in a tract if is often more difficult to find sales to compare to.
Real estate agents have access to the records of recent sales as well as descriptions of the homes that have sold recently. The agent will know how to properly interpret this data and adjust it to compensate for varying condition of the homes and any additions or variances on each property.
A Buyers Agent will provide you with all the data you need, interpret that data for you, and assist you in determining what to offer for a home.
In Port St Lucie, FL we use area numbers to group homes in the same geographical area. All comparable used to determine market value should be w/in 1-1.5 miles of the subject property. Unique homes can use more distant comparables with an explanation.
If you want to make sure you aren’t overpaying, ask your Realtor for the Comparables.
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