Pricing a property isn’t guesswork, it’s a blend of market data, methodology, and human judgment. Whether you’re selling, buying, or refinancing, understanding how valuations are formed helps you negotiate with confidence.

The three core methods

• Sales Comparison (Comps): Your home is compared to recently sold, similar properties nearby. Adjustments are made for differences such as bedrooms, renovations, lot size, and condition.

• Income Approach (for rentals/commercial): Value is derived from net operating income (NOI) and a market capitalization rate. Higher reliable income at lower risk means higher value.

• Cost Approach: Estimates the cost to rebuild the property today, minus depreciation, plus land value. Useful for new builds or unique assets.

What actually moves the number

• Location quality: school zones, walkability, transit access, and neighborhood amenities.

• Property specs: beds/baths, internal area, outdoor space, parking, energy rating.

• Condition & upgrades: modern kitchens/bathrooms, new roof/HVAC, layout efficiency.

• Market dynamics: supply vs. demand, interest rates, seasonality, and days on market.

• Legal & compliance: permits, zoning, condo HOA health, flood/fire risks.

Appraisal vs. market value

An appraisal is a lender-focused opinion at a point in time; market value is what a willing buyer will pay today. In hot markets, offers can exceed appraisals; in slow markets, appraisals may come in higher than bids.

How to prepare for valuation

• Gather documents: permits, upgrade receipts, surveys, HOA docs, energy bills.

• Fix the small stuff: lighting, paint touch-ups, squeaky doors, water stains.

• Stage smartly: declutter, brighten spaces, emphasize flow and storage.

• Provide your own “comp pack”: 3–5 relevant sold comparables with notes.

Common pitfalls

• Over-relying on price per m²/ft² across very different homes.

• Assuming Zillow-style AVMs equal appraisal outcomes.

• Ignoring micro-location (busy street vs. cul-de-sac, floor level, exposure).