How are House Prices Calculated?

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Here at Simpson Real Estate Appraisals, we understand that the process of selling your home is often complicated and confusing, and we want to help make it easier and more straightforward. In our experience, one thing that many of our clients have been confused about is how exactly house prices are calculated. To shed some light on the matter, our team has put together this article to give an overview of that very subject.

How are House Prices Calculated?

  • Appraisal. One key step in calculating house prices is to appraise the properties in question. The way this works is that a trained property appraiser comes to your home and inspects it, noting the condition of your appliances, wiring, plumbing, and every other system and feature. At the end of the appraisal process, you will get an estimate of your home’s value, as well as a breakdown of what, if anything, could be improved in order to get a higher price–for instance, if your wiring is outdated, then replacing it with modern wiring will increase your home’s value significantly.
  • Comp Sales. Another method of calculating house prices is based on comparing your home to similar ones in the area that have sold recently. By looking at data on recent sales of properties that closely match yours, your appraiser or real estate agent can estimate the ideal market price for your home. Of course, to use this method to its best effect, it’s necessary to have thorough knowledge of the local market, but our team has that in spades, and you can count on us to give you the accurate information you need.