Preparing a market analysis of your home is the most straightforward when there are very similar homes in your neighborhood that have sold in the past year.

If you have a 1500 SF home with no basement, and three nearly identical homes nearby have sold recently, that makes the market analysis more straightforward as those sales provide clear guidance toward your home’s market value.

But sometimes (perhaps often) it is not that simple.

We might look at recent sales in your neighborhood and find that most of the other homes in your neighborhood (that are sold lately) are 2500+ SF with a basement.

So what do we do?  We generally have two options, and we often pursue them both...

1.  Adjust Neighborhood Sales

We can start with recent sales in your neighborhood and make adjustments for the differences.  If most nearby homes are 1,000 square feet larger, we'll adjust their sales prices downward. If they have finished basements and yours does not, we adjust again.  The challenge with this option is that when the differences between your home and the recent sales are significant, the adjustments become larger, and the analysis might becomes less precise.

2.  Look Outside The Neighborhood

The other approach is to find homes that are more similar to yours -- even if they are in a different neighborhood.  Maybe there is another part of Harrisonburg or Rockingham County with homes more similar to your home related to size, layout, and condition. Those sales might provide a better indication of the value of your home, even if the location is slightly different.  Of course, the location and neighborhood matter -- so we might have to make value adjustments based on the location of the other homes.

Both Is Best

In most cases, I will prepare a market analysis using both strategies above... using not-as-similar-as-we-would-prefer homes in your neighborhood, combined with more-similar homes in other neighborhoods.