Establishing a price – how is it determined?
To accurately determine the market value of a house, stay as close to the target house as possible. Ideally, stay in the same neighborhood. When you are looking in a populated area, this is fairly easy. If you are looking in a rural area, you may have to spread your search over several miles.
Just remember to compare apples to apples. For a comparable sale to be truly “comparable” to the target house, it must be similar. That means not only that the house should be located in a nearby similar neighborhood, but also that the house should be similar in size and age.
Rule # 1: Use houses that have sold within the past 6 months (1 year max). The most recent sales are best.
Rule # 2: Use houses in the same, similar, or nearby neighborhoods. Stay as close as possible to the target house (within the subdivision or within 1/2 mile when possible)
Rule # 3: Compare apples to apples. Try to use houses built within 10 years of the target house and within about 300 square feet of the size of the target house.