How does an agent figure out what my house is worth?

An agent figures out what a house is worth with a comparative market analysis, or CMA: recent sales of similar homes near yours, adjusted for the differences in size, condition, age and features, plus a look at what is currently listed and what just went under contract. The result is an opinion of the range a buyer is likely to pay. It is not an appraisal and it is not the price. The market sets the price when a buyer signs.

Start with the comps

The core of any valuation is comparable sales, or comps. I look for homes that closed recently, are close to yours, and are similar in size, age, style and lot. The closer the match, the less adjusting I have to do. In a neighborhood of similar houses built in the same decade, this is easy. On an unusual house or in the country, it gets harder, and the range gets wider.

I also look at what is active and pending. Active listings tell me what you would be competing against. Pending sales tell me what buyers are accepting right now, even though I cannot see the price until closing.

Adjust for the differences

No two houses match. If a comp has a finished basement and yours does not, I adjust the comp down. If yours has a newer roof, a third garage stall or a larger lot, I adjust up. The adjustments come from what buyers in this market actually pay for those features, not what they cost to build. A remodeled kitchen rarely returns its full cost. A new roof does not add value so much as remove a reason to say no.

Condition is the biggest adjustment and the hardest to see from a spreadsheet. That is why I walk the house before I give a number.

Where the three estimates differ

	Who	What it is	Who ordered it
CMA	Agent	Opinion from recent comps and a walkthrough	You
Appraisal	Licensed appraiser	Formal opinion for the lender	Buyer’s lender
Automated estimate	Formula	Public records and past sales	Nobody

A website estimate has never been inside your house. It does not know about the kitchen, the foundation or the neighbor’s junk cars. It is a starting point. An appraisal comes after you have a buyer and protects the lender. A CMA is what you use to decide where to price and which way to sell.

What I do not do

I do not tell you a high number to get the listing. A house priced above what the comps support sits, and then it sells for less than it would have at the right price, because buyers wonder what is wrong with it. If I think your number is high, I will say so and show you the sales behind my opinion.

I also do not pretend the range is a point. On most Wichita houses I can give you a range I feel good about. Where it lands in that range depends on how you sell. A traditional listing lets you test the top of the range. An auction lets the bidders find it. A cash offer will usually land below it, in exchange for speed. Which one fits is a separate conversation, and I wrote about it in Auction or traditional listing.

How to get a real number

The valuation page gives you a quick starting range. For a real number, I need to see the house and pull comps for it that week, because the sales that matter are recent ones and the market moves. Current conditions are on the market page. Ask any agent you talk to for the comps behind their number. If they cannot show you the sales, they are guessing.