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What's My Home Worth?

At this point, you’ve probably already been to a half a dozen sites where they request the details of your home, and when you hit the ‘submit’ button, you’re instructed to enter your email address and phone number, so they can “send you the report!”

No bait-and-switch here. I want to give you an overview of the process real estate agents use to arrive at the value of a home; first generally, then a rough sketch of my own specific process.

[Full disclosure: I’m still going to say you really need to check with a real estate agent at the end of the day to get an accurate picture on your home’s worth. You’ll see why as we get into it.]

Before we get into it though, let me address a couple questions you might have.

First of all, can you trust a Zestimate? If you don’t want to read the full article, the TL;DR version is you can in very limited cases (and even then, you shouldn’t fully trust it).

Should I hire an appraiser? No, don’t hire an appraiser. Again, the short version is that appraisers aren’t reading the market like a real estate agent does.

Appraisers do precise calculations and are like the scientists in the lab. Don’t get me wrong, appraisers do good work and are immensely valuable, but not for this kind of application.

Real estate agents are in the trenches with buyers and sellers, and they have more experience and a more intimate knowledge of what’s going on in the market.

What a house will sell for and what it might appraise for can be very different numbers (as any experienced agent will tell you).

So, how do real estate agents arrive at a home’s value?


If you ask any real estate agent for the value of your home—unless it’s just an informal ballpark estimate—most agents will draft up a Comparative Market Analysis for you.

A “CMA” is basically a small sample of comparable sales (or “comps,” as we like to say) used to infer the worth of your home at a given time.

Comparable sales are recently sold homes that are similar to yours. Once you’ve got a collection of comparable sales (ideally three to five), you can evaluate the differences between the comparable sales and your home (“the subject property”) to arrive at a value range.

“Cookie cutter” neighborhoods can make the process significantly quicker as direct comps are easier to find.

But here in Atascadero, and where my office is in San Luis Obispo, and many places in SLO County for that matter, the neighborhoods have a pretty diverse mix of styles and sizes, making it a bit more complicated.

So, how would I find comparable sales to arrive at a home’s worth?


1. Location. Take a home from any neighborhood and drop that same home 500 feet away in a different neighborhood in San Luis Obispo and the home’s value could swing by a couple hundred thousand dollars. You need to look specifically in the neighborhood of the subject property. Establish the boundaries for your comps.

You also need to pay attention to location within the neighborhood—sometimes there are prized streets to be on because of privacy, and sometimes the street can be a thoroughfare, which can negatively impact the value.

2. Size. Clearly a comparable sale will be close in size. I’m generally looking for a home that’s within 200 square feet of the subject property. If I can dial it in even tighter, I will.

Also of note is the size of the lot. Land is worth a lot (especially in California) and the same house on a 7,500 square foot lot versus an acre lot is going to sell a lot differently (pun partially intended). So set a parameter for the lot size too.

3. Bed and baths. Next, for me, comes bedrooms and bathroom count. If I’m trying to find the value of a two-bedroom home, I’ll really try to hone in on only two-bedroom homes. But if it’s a three-bedroom home, I’m more willing to look at four-bedroom homes too.


Well, there’s generally a bigger break in home value from a two-bedroom home to a three-bedroom home, than there is from a three-bedroom to a four-bedroom home. Same goes from a one-bathroom home to a two-bathroom home, than from a two-bathroom to a three-bathroom home.

4. Condition. This is super important. With all else being equal, a home that’s updated will clearly sell for more than an outdated one, and an outdated one will sell for more than a fixer-upper.

A new kitchen alone might add $50k in value.

Also consider how contemporary the condition is. If it’s pristine condition, but 20 years old in styling, it’s not apples-to-apples with a recently remodeled home. So pay attention to the condition.

5. How recently did it sell. As a general rule, I’ll start by looking for homes that sold in the last six months. In a slowly appreciating market, this is a fine standard.

In a market like we’re in now—where home values jumped 10% in one quarter alone (!)—I’m looking for comps that sold in the last three months, but I’m paying much closer attention to homes that sold in the last month, if there are any.


In California, our market is been out of whack for some time. It’s a strong sellers’ market, meaning there are way more buyers than homes for sale. This translates to a dearth of sales data to sift through. So, often I’ll have to stretch parameters and make some adjustments.

This is where the math becomes a bit like art.

You might include a home with a larger lot because a good portion of the lot is not usable, so it becomes similarly valued to a home with a smaller lot. Or you might have to look outside the boundaries of the neighborhood, or look at homes slightly larger or smaller and adjust up or down the values to make them more similar to the subject property.

Really, the hardest part is making adjustments to the comps. In our area, perfect comps rarely exist, so you have to learn which sold homes are your closest comps, and then adjust for the differences.

This takes experience and it’s not always super intuitive.


The last important piece to factor in is the market conditions.

Is your market hot? How hot? Is it white hot? If this is the case, you might project that your home will sell more than the comps because prices are accelerating quickly (as they are at the time of this writing).

Also, what are the buyer demographics and trends? Are the buyers in your market valuing single-level homes? Are they rushing towards turn-key properties? Are there a lot of investors looking for those “contractor specials”?

All these things will effect value and desirability of your home.

Last note is that CMAs have short expiration dates because the market is always changing. Even in a normal market, there is a seasonality to it which may affect your home’s value.

Time passes, and new comps appear. So, if your agent has provided you with a CMA, but it’s getting a bit stale, you may want to request an updated one if you’re getting closer to wanting to sell that puppy.

Hopefully that gives you a good starting point for valuing your own home. If you have any questions on valuing your SLO County home, please feel free to get in touch.

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