How does a Realtor determine home value?

When an agent evaluates your home's value, they're doing more than running a quick search. Here's what actually goes into a well-prepared CMA:

Step 1: Select comparable sales

The agent pulls homes that have sold recently (typically within the last 90 days, though this can extend in slower markets) that are similar to yours in key ways: location, size, age, style, and general features. These are called "comps."

Step 2: Adjust for differences

No two homes are identical. The agent adjusts the comp values up or down to account for differences between each comp and your home. A comp with a finished basement when yours doesn't have one? Adjust down. A comp with an older kitchen when yours was recently renovated? Adjust up.

Step 3: Analyze the market context

Beyond the comps themselves, a skilled agent considers: how quickly homes are selling, how many offers homes are receiving, inventory levels, and recent trends. A market where homes sell in 5 days requires different pricing than one where they sit for 60 days.

Step 4: Arrive at a value range

The CMA doesn't produce a single exact number. It produces a supportable range. The agent will discuss that range with you and help you decide on a specific list price based on your goals and timeline.

The difference between a CMA and an appraisal

A CMA is an agent's professional opinion and typically provided free. An appraisal is a formal, credentialed assessment required by lenders, and costs several hundred dollars. Both use comparable sales, but the appraisal carries legal weight with lenders.