What are comparable properties? Comparable properties are the single most important tool in determining what current market value of your home. These are homes similar to yours in location, size, and features that have recently sold, preferably within the last 6 months. Don't even think about going back further than 1 year. Just don't do it, an appraiser wouldn't use them to determine the value of the house for the lender and neither should you.
Why the six month rule? Simple, the market changes all the time and home values change as supply and demand does. For instance, two years ago we built our home in Nolensville, and now, with the demand being so high, our home value has risen about $115,000. I knew it would rise, but didn't know it would be so dramatic. Another reason for me to use the "I told you so" phrase to my husband.
Let's talk about finding them. You'll want to look within your 6 month time frame for homes with roughly the same square footage and features. Ideally, you want to find 2 homes that have sold inside your neighborhood and one from a competing neighborhood. Apples to Apples. Account for differences in properties:
- Curb appeal -- Is it nicely landscaped or does the front yard look like a dust bowl?
- Condition of exterior -- Visually make notes of the condition of the roof, paint, chimney, driveway, fences, etc.
- Neighborhood -- Is the house well-kept and blend well with the rest of the neighborhood?
- Traffic/noise -- Is it located on a busy street or near a noisy freeway?
- Schools -- Is it in a good school district? Whether you have kids or not, owning a home in a top school district adds tremendous value to a home.
- Major Features -- 3 car attached garages, detach garages, outdoor spaces, gourmet kitchens can all add value
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