Dear Tyler, I look at a lot of homes in Highland Park, but how can I tell if they’re a good deal? I want to write an offer, but I don’t know what it’s going to sell for.
The only way to know what it’s going to sell for is to wait for it to close. But, by that time, it’s too late!
Values are determined by what similar homes in the area sell for. If you’ve seen the other homes and know what they sold for, you can make a list and find what I call the “value range”. How does the home you're looking at measure up? Think about the location, condition, curb appeal, everything. If it’s better than most of the other houses, you know it’s going to be near the top of the “value range”.
Just keep in mind these sales happened in the past, so if prices are going up in your neighborhood, you’ll have to account for that. Otherwise, you’re writing an offer based on what a house was worth six months ago. In Highland Park alone, home prices are appreciating at 10% a year at the LEAST so 6 months is a big difference.
This process is called the Comparative Market Analysis, or CMA. Once you get the hang of it, you’ll be very comfortable finding out what a home’s worth. I promise.