Considering the number of bank REO sales and foreclosures in the market today, it’s no surprise that determining property value is a difficult task.
However, one can easily this by taking the comparable sales (comps) approach by first looking for information at local government website based on the location. While there is plenty of information found online, not all of it is accurate, and so it is recommended by experts that one should find a local multiple listing service (MLS) to get the most accurate property data possible.
In addition, it’s important to consider three factors when taking the ‘comps’ approach, and they are:
An appraiser usually looks at houses within a one-mile radius and usually within the same division where they share similar styles and were built during the same time period. If you find a mix of properties within the same division, you’ll have to go past these dividing lines to determine its value. However, it’s important to be careful as these dividing lines might put comparable properties in another district and might not carry the same value.
#2: Square Footage
The square footage is another important aspect of determining a home’s value. Make sure you take this factor into consideration when finding the right price for houses in the same subdivision. But keep in mind that just if two houses in the same area have the same style, bedroom and baths but differ by about 100 square feet in footage, the value of the home itself will only increase slightly.
Simply put, the more number of rooms, the more valuable the home is. A three bedroom home at 1250 feet is far more valuable than a two bedroom home. Another factor that matters here is where the rooms are located – whether in the basement or the home floor. So, it’s important to consider the number of bedrooms and bathrooms as well as the quality of these rooms when trying to evaluate the cost of a home.