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How Much is Your Home Really Worth?

Many homeowners think they know how much their home is worth, but are they right?

There are many sources of data to determine how much your home is worth. Online real estate aggregators like Zillow, Trulia, Redfin, etc. that provide estimates of home values. Additionally, you might look at recent home sales in your neighborhood, found on one of the sites mentioned above or from discussions with neighbors. While all these sources are good, and I reference them when working up a price opinion, it's important to understand the data that goes into these "estimates," and then to accurately compare these values to your home.

Here are 5 tips when it comes to valuing your own home, or when valuing a home you're looking to purchase:

(1) Understand the difference between Market Value and Specific Value

Many individuals, as well as real estate professionals, will refer to the "market price" of a home. Market value is the likely price a property would bring in a fair sale on a "competitive and open market," according to the National Residential Appraisers Institute. This is a generalized term that connotes what a home "should" sell for in a given market, and essentially determines the price that any person would theoretically pay for a house. The key here is that it is very general. As I will point out, there are a number of factors that impact the desirability of a particular home, and homes may be highly unique, so it's important to consider the market price, but also to understand that the value of a home, or the price you accept for the sale of your home, can be very different from the "Market Price." Ultimately, the value of a home comes down to what a particular buyer will pay for it, not necessarily what the "market" will pay.

It is important to note here, however, that the market price plays an important role in the home sale process. Most buyers purchase homes with a mortgage, and a bank will not want to lend more money than home is "worth." Most purchase contracts, therefore, contain a contingency that the home appraises for at least the agreed upon purchase price. If it doesn't the buyer may back out, the price of the home may need to be lowered, or some other resolution will need to be agreed to in order for the sale to go through. The market price is therefore an important consideration when setting the listing price of a home, and can ultimately impact the sale price, even if a buyer is willing to pay above the market price.

(2) Review Real Estate Aggregator Platforms

While the algorithms are closely guard trade secrets, the basic premise is that they take in what they know about a home and compare it to recent home sales. The important factor here is that the platforms can only base their estimates on the data they have; things like square footage, number of bedrooms, location, etc. What they can't do is actually see the property and assess its condition, its views, layout, and other important considerations that are important to home buyers. Additionally, there's no input that value upgrades, such as kitchen remodels, addition of solar panels, or quality of materials. Although these key features won't go in to the estimated home value, when using these estimates to assess the value of your own home and the value of similar homes, look beyond the price estimate, and look for the missing inputs that make one home more or less desirable to another and which cannot be assessed in the aggregators' algorithms. They might be found in the home description section, or identified in the home photos.

(3) Determine How Much Home Characteristics are Worth

In San Diego County, many of us live in "cookie-cutter" tract homes. My house is probably 1 of 50 or so with the exact same floor plan. In these cases, it's pretty easy (as long as there have been recent sales) to get an idea of how much buyers have been willing to pay for certain features. Look at comparable properties (location, size, bed/bath, etc.), then identify the differences in home characteristics to the sales price. Additionally, take not of how much homes were originally listed for, how much they sold for, and how long they were on the market. This data can not only help you asses the pros and cons of your own home compared to alternatives, but will aide in determining the right price of your house and how long it may take to sell it.

Here's a list of the top 10 home characteristics my buyers have been looking for:

  • kitchen (solid stone counters, soft cabinet color, appliances)

  • lot (yard, patio, landscaping)

  • views (open space or your neighbor?)

  • central air conditioning

  • road location (busy road? cul de sac?)

  • flooring (quality and aesthetics)

  • solar power

  • lighting (recessed, bedroom overhead lighting)

  • bathrooms (finishes, cabinet color, hardware)

  • floorpan (open concept or broken up?)

(4) Study the Market

Supply and demand in the real estate market follows along with what I said in section (1) regarding market value versus specific value: supply and demand is unique to the specific home. If you hear that "the market is hot," it doesn't mean that your house is hot. Likewise, if you hear that "the market is slowing down," it doesn't mean that your house won't have multiple offers on it the day it's listed. You can't just look at the market in general and think that it applies to your home, you need to look at the entire market from the top down. At the top, consider mortgage interest rates. Generally, as rates go up, demand for housing everywhere will go down because less people will be able to afford the same home price at a higher interest rate. Moving down, consider the demand in your region by looking at things such as new developments and employment opportunities nearby which can lead to increased demand for housing. Keep narrowing down the market down to your particular neighborhood, which can be roughly assessed by looking at average time on the market for recent home sales in your neighborhood.

Beyond just studying the general demand for housing in your area, other elements to consider are the demands for your type of home, the timing of your sale, and the income demographics in your area. The demand for a studio condo is likely to be much different than for a 4 bedroom house. More people buy in the summer months than during other times of the year. And if income demographics are changing, home values will likely follow. These factors are especially important in areas such as here in Oceanside, where every summer thousands of military families are relocating from other duty stations. While you cannot control where your home is located or what type of house it is, you can likely control the timing of your sale, or at least have a better expectation of the demand your property will have and a more realistic idea of how fast and for how much your home will sell.

(5) Study Comparable Home Sales

The best way to assess the value of your home is through a detailed study of recent home sales. This is not an easy process, but even in 2019 with all the data and technology we have, it's still the only way to get a truly accurate picture of what a home is worth. Like I mentioned previously, the home aggregator sites can only work with what they've got, and until the technology gets to the point where it can scan pictures and assign greater detail to a home's characteristics, we'll have to do it manually by analyzing active, cancelled, and sold listings. Even then, we will still need to assign a value to those characteristics. What's more is that we then need to project what those characteristics mean in the current market.

For example, a few years ago when prices in San Diego County were lower and demand was at its peak, if your home was in a desirable location, you may have been able to find a buyer within a week after listing, even if your home was in desperate need of an update. Buyers then likely expected the market to continue to rise, so they may have equity in their new home after a few years even if they had to make numerous updates. Today, however, the market in general has slowed down, and buyers have become more picky. So when looking at comparable homes, you can't just look at key characteristics such as location, square footage, number of rooms, etc. You will also need to analyze the more specific differences between your home and the comparison property, and in addition to the sale price, look at how long the other home was on the market.

If any of this seems too complicated, and if your property is in the North County San Diego area, give me a call or shoot me a text, and I'll be happy to help you out!


I am a Realtor with Three Lagoons Realty, focusing on the coastal cities in North County San Diego. The Marine Corps moved me to Camp Pendleton in 2009, but the city, the people, and the weather are keeping me here! My wife and I, along with our two young daughters and two Goldendoodles, plan to make Oceanside, CA our long term home. My goal with this site is to highlight Oceanside real estate, and to provide useful information for Oceanside residents, and anyone else who might gain something from it. If you have any questions about anything I said here, please email me at and I'll be happy to discuss anything with you.

Disclaimer: the contents of this article are solely the opinion of myself, and do not reflect upon the position or opinion of Three Lagoons Realty, my managing brokerage.

Gregory Butler

California Real Estate Salesperson

CA DRE: 01962445

Three Lagoons Realty

Megan Schenck, Broker

CA DRE: 01735296


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