There are several ways to estimate the value of a home, each with its own strengths and weaknesses. Here are a few of the most common methods:
It's important to keep in mind that there is no one "right" way to estimate the value of a home, and the final value will depend on a variety of factors and opinions. You may want to get multiple estimates or use a combination of methods to get a better understanding of your home's value.
If you are planning to sell your home, I would recommend speaking with an agent who can provide you with a Comparable Market Analysis (CMA) and also provide you an insight on current market trends, your local market situation and make an informed decision on pricing and marketing your home.
The most common way to estimate the value of a home is through the comparable sales method, also known as the "comps" method. This involves looking at the prices of similar homes in the same area that have recently sold. A real estate agent or appraiser will usually help you find comparable properties and make adjustments for any differences between them and your home, in order to arrive at an estimate of your home's value.
This method relies on the principle of substitution, where similar homes in the same area are used to estimate the value of your home. Comparable sales are often considered to be the most reliable way to estimate a home's value, because they take into account recent market conditions and provide a realistic picture of what buyers are currently willing to pay for a home similar to yours.
Ultimately the true value of any home is the price that a buyer is willing to pay, and the comparable sales method gives an idea of what buyers have paid for similar properties in the recent past and can be a good starting point for estimating the value of a home. The real estate market will largely dictate what you can sell your home for. Your local real estate agent can help you with this because the know the market and have the data.
The market data used in a comparative analysis, also known as a "comps" analysis, typically comes from public records and multiple listing services (MLS). Public records are records kept by government agencies that are available to the public, and they include information such as property sales and ownership, tax assessments, and property descriptions. MLS is a database of homes for sale and recent sales that is maintained by real estate agents and accessible only to members of the local real estate community.
In the United States, public records of real estate transactions are typically maintained by county government office and you can visit the office and have access to the records. While real estate agents have the access to the MLS, this data is not available for the public.
The market data from public records and MLS is then analyzed to find comparable properties that have recently sold in the same area as the subject property. This data can be used to identify trends in the local real estate market, such as average prices for similar homes, as well as to make adjustments for any differences between the subject property and the comparable properties.
It's important to note that while this data is considered to be reliable, there may be discrepancies between the information in public records and MLS and the actual condition of a property. That's why an onsite evaluation by a professional appraiser is considered important and done before determining the value of the property for a mortgage. Also, Idaho is a non-disclosure state, which means that public data is not as reliable.