What's My House Worth | Home Price Calculator

Home Pricing Calculator: What's My House Worth?

Over the last 18 years of having my real estate license, I have been on many listing appointments. And the BIG thing sellers want to know more than anything else is what I’d recommend as a list price for their home.

So when I meet with sellers to talk about selling, I now lead with this, the pricing analysis, and then for the rest of the appointment, I talk about the ways I work to get them that price.

In this post, I will explain how to come up with a list price for your home. I’ll walk through the math and the art involved with pricing your home with the market. I will show you how much variance there is with online valuation tools and why you should approach those with caution. And then at the end, I’ll cover the common mistakes sellers make when pricing their home that can cost thousands. So be sure to stick around for that.

But first, I have to make this disclaimer. What I provide is an estimated sale price for a property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice. I am not a licensed appraiser. I’m a Realtor giving you a behind-the-scenes look at how we work.

Alright, now to the good stuff…

Setting the right list price is one of the most critical decisions you'll make when selling your home. Price it too high, and it might linger on the market.  Price it too low, and well, you've probably left some money on the table. It's all about finding that sweet spot, so let's break down the process.

The heart of it all is the CMA, or Comparative Market Analysis. It's when your real estate agent, someone like me, digs deep into the numbers! Here's what goes into the CMA:

Active Listings: We check out the competition: what other homes are currently on the market in your area? How do they compare to yours? I also call this la la land. It’s the price that sellers want to get but haven’t found a buyer willing to pay it.

Under Contract and Pending Listings: We take a look at these because these tell us what people were willing to make an offer on. But these are more informative to give us clues as to where the market is headed and not so much numbers we can crunch for your price. Because the actual list price to sales price can vary widely, you’ll want to be cautious on using these numbers in your calculation.

Recent Sales: I call this the dose of reality. We analyze homes similar to yours in your area that have recently sold. Things like square footage, number of bedrooms and bathrooms, and overall condition. We make adjustments to do our best to match the comparable homes to yours. 

The CMA gives us a solid baseline, but it's not the entire story. We’ll also consider any unique features your home has. Does your home have a great backyard with a pool? Or maybe a beautifully upgraded kitchen? These things add value so we need to factor those in.

And this is where having some market knowledge can really pay off. Some unique features may not be as valuable as you think. 

It’s possible you over-upgraded for the area.

It’s possible your selections aren’t in line with the current market or area trends. It doesn’t mean they’re bad, it just means they’re taste specific and that can be a harder buyer to find. Like if your design is traditional in an area where modern farmhouse is the desired look, that will need to be factored into your list price.

Another element we consider beyond the CMA is how the market is currently performing. Are new listings selling higher or lower than their previously sold counterparts? Are we seeing time on the market increase or decrease? What are interest rates doing? Is it a buyer’s or seller’s market? What is the trending percent list price to sales price?

With all that considered, the goal is to price your home competitively while maximizing your return.  Think of pricing as a bell curve. Price too low, you're leaving money on the table.  Price too high and you're missing out on qualified buyers. We want to position you right at the top of that curve, attracting great offers and a quick sale.

So that’s a quick run through the process, but let’s take a look at this in real life. For this exercise, I’m going to refer to the property I’m trying to come up with a list price for as the subject property. And this is assuming the subject property is a single-family, detached home, in a neighborhood. If you’re trying to determine a list price for land or multifamily properties, a lot of these concepts will apply, but there are other things to be considered, so this approach won’t give you as precise of a list price as you may be looking for.

Step 1: Determine the parameters of your search.

When I approach a search, I first attempt to find something in the neighborhood that is pretty close as far as bedroom and bathroom count and plus or minus 10% of the subject property’s size. 

So if the subject property is a 4 bedroom, 2.5 bathroom home that’s 2500 square feet, I’ll first attempt to find a home that’s 4 bedrooms, 2.5 bathrooms, and as small as 2,250 square feet and as large as 2,725 square feet.

If I can’t find that exact match, I’ll remove the bathroom parameters, since the size parameters usually controls for any crazy variations. 

Now why the 10% allowance in size?

Well, it’s important that you stick to this range because price per square foot changes quite a bit. The price per square foot of a home has an inverse relationship to the home size. So as the size of the home goes up, the price per square foot of the home goes down.

I had a seller recently tell me their house is worth well over what I suggested because they were using the price per square foot of a home that was 30% smaller than theirs to determine their price. Sorry, I know that looks good on paper, but it just won’t work. 

If the subject property is in a neighborhood that’s mixed with resale homes and new construction homes, you’ll want to make sure you’re not pulling any new construction homes. Stick with resales. Just as you wouldn’t be okay buying a used car for the same price as the brand new version, a buyer won’t be okay paying for a ‘used’ home if it’s the same price as the new version.

There are some neighborhoods that have homes built in a wide range of years. If you can, try to stick to a five to seven year range above or below the subject property. So if the subject property was built in 2010, if you can find three to five comparable sold homes that range in year built from 2005 to 2015, great. If you need to go out a little more in age to grab a few more sales, you could move it to 2003 to 2017.

Step 2: Get active listings, pending sales, and closed sales as close to the subject property as possible.

I first start at the neighborhood level. If you’re in a small neighborhood with few sales, I start making a circle around the home where I go out about half a mile each time until I can get about 3-5 sales for homes similar in size to the subject property.

Pro Tip - I try not to go over major roads. If there’s a major road between the subject property and the comparable, even if all else is the same, very often home values are different when on opposite sides of major roads, so you will likely want to exclude those.

Another Pro Tip, the subject property could be close to a school boundary line. You’ll want to make sure that the schools are the same for the homes you're comparing the subject property to. If they aren’t the same, you’ll want to make sure the schools have the same desirability and ratings as the schools the subject property is zoned for.

Okay, so now you’ve pulled 3-5 comps that are close in size, age, and location to the subject property. Now what.

Step 3: Now we adjust.

No two homes are alike. So now we have to add and subtract from the comparable homes to get them to be as close to the subject property as possible.

And here’s an example of one I just did on a client’s investment property.

We take the subject and I adjusted $45 per square foot for the size difference.

I listed out the upgrades the comparables homes had and then put an estimated value to those updates 

And this is where there’s some art to the adjustments. These are judgment calls. There’s no hard and fast rule that these are the ways to adjust. It’s based on experience and seeing how buyers adjust their offers based on what a home does or doesn’t have. So the way I adjust the numbers may be completely different than the next agent. And this is why you could meet with five different agents and probably get five different suggested list prices. And the higher priced home you have, the wider the range of suggested list values.

Because this was a smaller home, the amounts given for the different updates were much smaller. If we were talking about a 3000 square foot home, I’d probably give more like $5,000 for granite, $3,500 for a half bathroom and $7,000 for a full bathroom. Also, depending on the overall price point for the area, I’ll adjust the square footage with a different price per square foot.

So the items I typically adjust for are lot size premiums, pools, other outdoor upgrades, bathrooms, square footage, interior upgrades, and enclosed garage spaces.

Once you adjust for the property features, then adjust for any seller concessions. Now for a state like Texas, which is a non disclosure state, the final sales price and the seller concessions aren’t available to the general public. So this is where having a Realtor comes in handy because they can get this data.

Seller concessions are what a seller pays for the buyer at closing. And it’s a direct hit to the seller’s bottom line, so I like to take those into consideration when determining a list price. It’s also good to know as a seller if a lot of buyers are currently asking for concessions so you can be prepared for that request.

Step 4: Find your Average

Once I get all of that information figured out, then I take the average of the adjustments and come up with a suggested list price.

From there I look at market trends. If the market is trending down, I discuss that with the seller to determine if it would be better to list at or below the average. On the other hand, if the market is tending up, I discuss with that seller to determine if it would be better to list at or above the average. 

Okay, so you have a good sense of what the market will currently bear for your house, but what if you’re tempted to avoid the number crunching I just went through and just go with one of those online valuation tools?

I will show you how much variance there is with online valuation tools and why you should approach those with caution. 

So here are two different sources I used to search for a value estimate for a property that I had just received an appraisal on. That appraisal came in for $460,000.

One of them gives a range of $452,000 up to $480,000. Now this one is actually pretty close. But had you listed at the low range, you could’ve left money on the table. And at the high range, you could’ve priced too optimistically and alienated buyers in a tougher market.

And here’s another one that shows a value of $447,080. Had you gone by that one, you definitely would’ve left money on the table.

So, taking a little extra time to crunch the numbers is pretty valuable.

Now for the last part of this video on determining what your house is worth, I wanted to touch on a few of the common mistakes sellers make when pricing their home that can cost thousands.

First - Chasing the market. In the video I made, How to Sell a Home fast, I go into the concept of chasing the market with pricing. You can check out that video to get the full rundown of how that works and why I advise against it, but in a nutshell, it’s essentially always trailing where the market is because you’re trying to catch up from where you should’ve started, and the cost to catch up can be more than you would’ve lost had you priced right in the first place.

Second - Signing up with an agent who buys your listing. Buying the listing is a term we use to describe a tactic some agents use to woo you into signing a listing agreement with them. It’s when they tell you that they can get you a price that’s much higher than what the data supports and they’re able to do that because they have skills that no other agent has or because they see how wonderful your house is, the rest of us just can’t. But then you’re left being disappointed because you were given an unrealistic expectation in the beginning and you have to then chase the market with your pricing (like I just mentioned) to get your home sold.

Now I will caveat that last point to say that price drops happen and any agent who recommends a price drop didn’t necessarily buy the listing in the first place. There are a lot of great agents out there and we do our best to price your home with the market, but tides turn and market conditions change. A neighbor may list their home for considerably less because they need to get out and that, in turn, affects your pricing. Interest rates could change direction. Market demand could shift. For full disclosure, I have recommended plenty price drops in my 18 years of real estate, so they happen. And my general rule of thumb for pricing is that if after one month or ten showings you don’t have an offer, then it’s probably time to take another look at your price.

And the third and final suggestion I have about pricing that can save you thousands is not so much about pricing but about selling to an internet buyer. This is one of those companies that tells you that you can avoid the hassle of listing your home and sell to them directly.

I had a client who recently approached one of these companies to see if it would be advantageous to do this so they could move quickly since the market had slowed where their home was located. It’s the same client where we just got the $460,000 appraisal completed. Well, this ibuyer company offered $392,700 for their home. And there were fees to pay on top of that! Had my client accepted, they would’ve left over $65,000 on the table! I’m so glad they didn’t do that!

So now you’ve seen behind the scenes of how us Realtors come up with a suggested list price. If you’d like more selling resources, just go to sellingguide.livingindallasfortworth.com

Or are you ready to hit the easy button on getting your home sold? We can help you with that.

I’m based in Dallas-Fort Worth but have nation-wide reach. we’ve developed a best-in-class screening process to help you do just that at absolutely no cost to you.

Wherever you’re located, our process ensures you get a dedicated team of experienced professionals. Agents who thrive on understanding the nuances of selling, from market analysis and pricing strategies to negotiations and closing the deal, along with staging and marketing expertise. This means you can rest assured that every detail is being meticulously considered and handled by experts.

Your next step is just to tell us a little about you at topagent.livingindallasfortworth.com.

And if we haven’t met yet, I’m Jennifer Shannon. I’m a Realtor and Broker associate with The Crestedge Group at Keller Williams.

You can reach out to me by phone or text to 214-803-4444 or start with an email to jshannon@kw.com.