How I check a home's value before I trust the number

Question

I got burned trusting one number. An online estimate said $263K on a house I was looking at. County records said $196K. Sold comps backed the county number.

Now I check value three ways before I take it seriously:

1. Sold comps — last 6 months, within about a mile, similar size and age.

2. County appraiser value — a sanity check, not the final word.

3. A second estimate — only as a tiebreaker.

If the first number and the comps disagree by more than about 10%, I trust the comps.

How do you check value before you trust it — is there a check you always run?

Lauren Cutchen · Answer

@Josh Ray love that you trust the comps over the online number. One thing for anyone looking in Texas: we're a non-disclosure state, so sale prices don't show up in county records and the online estimates are guessing even more than usual. Appraisal district values can lag too, especially in newer north Houston/Conroe areas where new construction skews things. Your best bet here is pulling real sold comps through an agent's MLS access. What market are you looking in?

Josh Ray · Answer

Tampa Bay, Lauren — Hillsborough and Pinellas counties, the Tampa side of Florida.

Your Texas point explains a lot. Florida is a disclosure state, so sold prices are public record here — that's what makes my county check worth anything. In a non-disclosure state the online estimates are guessing on top of guessing, and your way is really the only way: real sold comps through MLS access, and treat the appraisal district number as a lagging indicator at best. New construction skewing the district values is a wrinkle I don't have to deal with — sounds like it cuts both ways, slow to rise and slow to correct.

James Jones · Answer

Sold comps win, and I keep them tight. In Memphis I only trust sold comps in the same ZIP and on the same kind of street, similar size and condition, from the last few months. A renovated comp next to a house that needs a full rehab is not a comp. I also drive the street before I trust the number, because a ZIP median hides a bad block. My ARV has to land in a range I can actually defend: $180K to $265K on the single-family houses I buy under $100K. Then I check the rent the same way. If the ARV is real but Section 8 rent is not $1,395 to $1,950 for 3 bedrooms or more, the deal still does not work. When comps and rent disagree with the asking price, I trust the comps and the rent, not the seller.

Josh Ray · Answer

James, the drive-the-street point is the one my process was missing. All three of my checks are desk work — comps, county value, second estimate — and a bad block can pass every one of them. A ZIP median hides exactly the streets you don't want to own on.

Your rent band does the same job as my value range: a hard floor the deal has to clear before it gets any more of your time. Comps and rent agreeing with each other is worth more than either one alone — when they disagree with the asking price, the asking price is the one that's wrong. Appreciate you laying it out with real numbers.

Josh Ray · Answer

Divin, the rent check is a good backstop — if the value doesn't make sense against what the house rents for, that's a red flag no comp set can fix. And agreed on actives and pendings: sold comps tell you where the market was; the actives tell you what buyers are refusing to pay right now, which is its own data. Appreciate the CPA angle on it.

Divin Kanyama · Answer

That's a painful lesson, but a good one @Josh Ray. Online estimates are built on automated models, so they struggle with condition, updates and local quirks. Your three-step check is solid, and trusting the comps over the estimate is the right call.

The one check I always add is adjusting the comps for condition. A sold comp that was fully renovated isn't comparable to a house that needs work, so I compare the finishes and repairs, not just size and age. I also look at active and pending listings nearby, since they show where the market is heading, and I ask a local agent for their opinion on the street. For rentals, I back into value from rent too, to see whether the price makes sense for the income.

BJ Everson · Answer

Josh, good habit. Two adds. On 2-4 units the appraiser also weighs income, so I check value with sold comps and against the rents (leased, not asking) to see whether the two agree. And condition adjustments matter more than people expect: a fully renovated comp next to a dated subject can swing the number a lot, so I sort comps by condition before I average anything. County values are a sanity check only, as you said, since they update on a reappraisal cycle and can lag the market. What's your rule when there are fewer than three good comps?

Josh Ray · Answer

Caleb, your rules are tighter than mine and I like them — within 100 sq ft and age within 10 years especially. I usually allow a little more swing on size and adjust for it, but keeping the comp pool that tight takes out a lot of the judgment calls. Thanks for sharing them.

Josh Ray · Answer

Matthew, appreciate the adds — condition matching is the one that has burned me. A renovated comp next to a dated house can be off by tens of thousands, and the spreadsheet won't warn you. Your point about concessions is one I underuse: a sale that closed with $10K back to the buyer isn't really the price on the record. Pendings too — they show where the market is heading. Thanks for the lender's angle on it.

Josh Ray · Answer

Good question. When I can't find three clean ones, I widen in a set order. First I go back in time — 6 months becomes 9 or 12 — before I go wider on distance. Older and close beats newer and far away for me. If I do stretch distance, I stay in the same kind of neighborhood — same school zone, same side of the busy roads — and I keep bed/bath and condition matched as long as I can.

With fewer comps I lean harder on the other two checks: the county appraiser's value as a sanity check, and a second estimate. Then I work off the low end of the range instead of the middle. If the deal only works on the optimistic number, it doesn't work. I'd rather offer on the defensible number and let the seller say no than talk myself into a value the appraiser won't find later — and the appraiser is going to have the same thin-comp problem I do.

How I check a home's value before I trust the number

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