Home Value Update – How To Use Market Comps


How much is this view worth?

Like we mentioned in our recent balance sheet post, we booked an increase in the value of the PoP homestead, our primary residence. This is the second increase we’ve booked since we originally wrote our original series on determining a home’s value, so I thought I’d do a bit of a condensed update on how we use market comps to keep track of our home’s value.


Step 1 – We Ignore Zillow

Though it’s calmed down in the past couple years, Zillow was more than somewhat schizophrenic in its home valuation numbers during the Great Recession a few years back.  (Think bouncing between $120K and $180K in a week and back again.)  I’m prone to distrust auto-valuation sites like Zillow (and Trulia and others) because they tend to assume that every house follows the same central tendencies.  In reality, neighboring houses might have very different features so while some aspects might be fit for comparison, the differentiating features get lost in many of these algorithms.

In short, these algorithms are good at quantitative analysis and overarching trends, but less good at the qualitative aspects of home-valuations. So if you live in an area where the homes are not exact replicas of one another, these kind of auto-valuations are probably going to be more error-prone for you.  Instead, you should use market comparable sales analysis, also known as “comps”.


Step 2 – Find Comps

What Are Comps?

They are comparable home sales that have happened recently in your neighborhood. The idea goes that if your neighbor’s home is a lot like yours and just sold for $200K in an open market, then if you listed your home you’d be likely to get $200K in that same open market. Your ideal list of comps will contain sales of homes of similar age, size, and condition to yours that have taken place within the last year in your neighborhood.

Where Can I Find A List of Recent Sales?

While a realtor can get you a list of recent sales in your area, and you can keep track of the “For Sale” signs around the neighborhood, there’s actually an even easier way to get this list on an ongoing basis so you don’t have to continually bug your realtor friends.

I use a free site called ePropertyWatch. Free is great, but right now it only allows you to register one house per email address and does require that the house be yours, so it does have its limitations.

When you register your house and email address on ePropertyWatch, it creates an alert where you will get emailed whenever there are foreclosures or recent sales in your area.


Like this one. Then you click through and see where the sale happened.


Step 3 – Add Them To Your Spreadsheet

Once you know where your home sales are, you can cross reference them with your county’s public records database, usually run by your county property appraiser. We also like to do a walk-by and take note of anything major that might be worth noting.
Then I fill in my spreadsheet where I note:

  • Sale date and address
  • Sale price, livable square feet (in FL we call this “under air” area, and it doesn’t include area for garages, patios, or Florida rooms
  • Features of the property like beds/bath and features that add value like a garage, a pool, jacuzzi, or a waterview

These are pretty common Florida features that I saw our appraiser use on our property, as well as our county property appraiser use when we fought our property taxes.


Step 4 – Apples To Apples Deconstruction (aka Spreadsheet Magic)

In order to compare homes that have different features, you need to first strip the values of the features out (for us, we use $10K for each car the garage holds, $20K for a pool, $5K for a Jacuzzi, and $25K for a lakeview – values taken from professional appraisers in our area, yours may differ), and arrive at a price just for the structure.  (So for a 2 car garage, you’d subtract 2*10,000, but for a 1 car garage just 1*10,000.)  Then you divide that by the livable area, and you get your price per square foot ($/sqft) for the bare structure.


For our example, you can see we stripped off some one- and two-car garages, and one pool in our comps, and arrived at a mean price of $158.72/sqft for our six comps sold within the last 12 months in our little neighborhood.


Step 5 – Rebuilding Your Home (Value)

Multiplying the mean price per square foot by your home’s livable area gives you a price for the base structure of your home. For us, that’s:

$158.72 * 1,110 sqft = $176,177

But we need to rebuild the features of our home. So we add back the value of our 1.5 car garage ($15,000), then the value of our pool ($20,000), and the value of our waterview ($25,000).

$176,177 (structure) + $60,000 (features) = $236,177

But because we know the interior of our home is in need of some work (namely most buyers would want to tear out our floors and install new kitchen cabinetry while they are at it), we also subtract off a discount that feels “reasonable” for this. Our “reasonable” discount for the interior of our home relative to the largely unknown interior conditions of the homes on our comp list is $20,000.

$176,177 (structure) + $60,000 (features) – $20,000 (condition) = $216,177


If it sounds a little hand-wavey at times, it is. Valuation by comps is a bit of an imperfect science that requires some solid estimating skills and then a big bite of humble pie. It’s the humble pie that reminds us to discount known imperfections in our own home, and then again to round down. Which is why we recorded our home’s value at:



I know comps valuations tend to intimidate a lot of people, but once you get in the groove of updating your spreadsheet (which ePropertyWatch’s friendly email reminders keep you on top of), it’s actually REALLY easy to keep your spreadsheet updated as new sales come in.  And it’s probably a LOT more accurate than Zillow estimates.  =)


Any questions on market comps?  Have you ever used ePropertyWatch to track home sales in your area?  Anyone willing to give tracking their own market comps a try?

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