{"id":42383,"date":"2024-03-29T11:31:12","date_gmt":"2024-03-29T18:31:12","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=42383"},"modified":"2024-03-29T11:31:12","modified_gmt":"2024-03-29T18:31:12","slug":"sales-comparison-approach","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/sales-comparison-approach\/","title":{"rendered":"What\u2019s the Sales Comparison Approach for Home Appraisals?"},"content":{"rendered":"

As you prepare to sell your home, your first big question will likely be, \u201cWhat will be my listing price?\u201d This is a tightrope decision that requires just the right balance, and it starts with knowing your home\u2019s value. To find the Goldilocks price point, most real estate agents use the sales comparison approach.<\/p>\n

In this post, we\u2019ve asked two top real estate experts to share insights on how this approach plays a key role in your home sale, how it works, and another pricing option you might need.<\/p>\n\n\n\n\n\n

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How Much Is Your Home Worth Now?<\/h3>\n

Home values have rapidly increased in recent years. How much is your current home worth now? Get a ballpark estimate from HomeLight’s free Home Value Estimator.<\/p>\n \n

\n Get Estimate<\/a>\n <\/div>\n <\/div>\n<\/div>\n\n\n
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What is a sales comparison approach in real estate?<\/h2>\n

The sales comparison approach is where the word \u201ccomp<\/a>\u201d comes from in the real estate industry, explains Tom Horn<\/a>, a leading appraiser in Alabama with more than 34 years of experience.<\/p>\n

\u201cWe look at other properties that have sold recently that are very similar to the property being appraised. We then \u2018compare\u2019 it to those properties to come up with a value. We take into consideration any differences, whether the house is bigger in square footage or has more features. We make adjustments for those differences, and that provides a range of value that we then use to reconcile a final value.\u201d<\/p>\n

John Swartz<\/a>, a top real estate agent with 22 years of experience pricing homes in New Jersey, Pennsylvania, and Delaware says agents also use the sales comparison approach to determine a property\u2019s list price. \u201cFor example, we look at what’s on the market right now that\u2019s similar to the subject property, and what did it sell for in the past?\u201d<\/p>\n

Swartz says appraisers and agents using this method will typically go back three to six months. \u201cBasically, we’re trying to find as close to the exact same properties as we can to come up with a value based on the market demand in that area.\u201d<\/p>\n

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What do appraisers look for in the sales comparison approach?<\/h2>\n

The sales comparison approach<\/a> is foundational in real estate transactions, as it provides a clear picture of how your property stacks up against others in the market. This offers lenders a value estimate to back a mortgage loan, and so both sellers and buyers have a basis for negotiation.<\/p>\n

Appraisers typically look at a range of factors during this comparison, including:<\/p>\n