Several factors go into pricing a home. This is another reason it is important to have a real estate professional on your side. Many homeowners believe they ‘know’ how much their home is worth based on either what they paid for it, or what Zillow and/or Trulia has it priced at. These sites are not accurate because they don’t have the most current information. This information can only be pulled from the Multiple Listing Service (MLS).
A comparative market analysis (CMA), done by real estate professionals, include a number of factors such as sale prices of homes similar to yours that have sold nearby in the past few months, number of days homes are spending on the market, expired listings that have not sold, current listings that would be competition and other market conditions.
There are so many discrepancies when it comes to home value that realtor.com came up with a list of what your home isn’t worth:
“Property tax assessment. Each jurisdiction uses a formula to establish home values for a tax assessment, but this price rarely correlates with the market value of your home. Your tax assessment can be higher or lower than the current market value.
Homeowners insurance value. Insurance estimates are based on the cost of replacing your home without the land, so this value is skewed compared to market value.
Mortgage balance. Your mortgage balance simply reflects your home loan. The difference between your loan payoff and the market value of your home is your equity.
Neighbor’s home value. Even if your neighbor’s home is similar to yours, it’s not likely to be identical. A REALTOR® can help you evaluate your home’s worth in the context of other nearby properties.
Cost when you purchased the home. Regardless of how long ago you purchased your property, the value can have gone up or down.
Desired value. You can always try to put your home on the market for your desired price, but if you’ve over- or under-priced it, you’re shortchanging yourself. because you’re either selling too low or your house could sit on the market and eventually sell for less than if you priced it correctly in the beginning.”1
In short you should never ‘guess’ at what your home is worth. It’s a lot more complicated than it may seem, which is why it’s always important that you contact a real estate office or professional that will give you a free market analysis.
1 source: http://www.realtor.com/advice/how-much-is-your-home-really-worth/