When no homes have sold in your neighborhood within 6 months, then it is acceptable to go outside of the subdivision if needed. Overall we like to get comps that are the same (two story vs. two story) ranch vs. ranch, bi-level vs bi-level, within 1 mile if possible, within 5 years+/- if possible. That is not always going to be possible. Overall, I always tell every seller that there is no such thing as a scientific appraisal. It is only a opinion of value and a starting point of sorts. The only real opinion of value that counts is what buyers are willing to pay for your home, not what you paid, or what you owe, or what you "feel" your home is worth. It is a market, similiar to the stock market. Home values go up and down, along with gas prices, interest rates, jobs in the area, people moving and looking for homes (even within price catagories) at any one point in time. Every home is different, as to location (different lots), amenities, square footage, floorplans, personal taste, etc.
There is no exact formala that says each home in a subdivision, or area is worth exactly $xx per square foot.
Home appeal, landscaping, time of year, and all of the factors stated above will make the market value (what buyers are willing to pay) of your home at the time it sells. Foreclosures can make a difference of what your home sells for. When there are foreclosures in your neighborhood, it can affect your homes value, especially if it is next door and the lawn and home has not been well cared for, or even if it is down the street or a block over you are still competing with it. Mine subsidence too can take a real toll on a neighborhoods stigma and of course home values, even if your home has never been affected with it. Long and short of it is your home is only worth what most average buyers are willing to pay.
P.S. In a declining market the home that sells the soonest (sold 6 months ago or a year ago) and fastest (not a lot of days on the market because days on the market = less value) sells for the most money!
You also have to look at your price range and determine how many homes in that price range have sold in the last year and the last 6 months. And compare that to how many are on the market (active listings) right now in that price range to determine how many month(s) of supply there is right now assuming no new homes come onto the market. If you need to have your home sold within 3 months and there is a 7 month supply of homes in your price range, you need to price it accordingly. Nothing will eat up your pocketbook like a vacant home when you have to leave and it still hasn't sold, so keep that in mind too!
Paul Walker, Broker Associate since 1997
Realty Executives of Metro East
1109 Hartman Ln, Suite 200
Shiloh, IL 62221