If you’re thinking about selling, the first question is usually the simplest one: what is my home actually worth? The answer matters more than almost anything else in your sale. Price it right and you attract serious buyers from day one. Price it too high and it can sit, which often means selling for less in the end.
Here’s how to think about your home’s value the way buyers, appraisers, and agents do, and what to watch out for along the way.
Start With Online Estimates, but Don’t Stop There
Most homeowners start with an online estimate from a site like Zillow or Redfin. These tools are useful for a quick ballpark, but it’s important to know their limits.
Zillow publishes its own accuracy figures. For homes that are currently listed for sale, its estimates have a nationwide median error of around 2%. For homes that aren’t on the market, which is the situation for most people checking their value before selling, the median error is around 7%. Median means half of homes miss by more than that. On a $1 million Los Angeles home, a 7% miss is $70,000 in either direction.
Online estimates rely on public records and recent sales. They usually can’t see:
- Your home’s condition and the quality of any upgrades
- A remodeled kitchen, new roof, or updated systems
- Views, privacy, or a layout buyers love
- A busy street, steep driveway, or other drawbacks
- Whether an addition or ADU is permitted
Treat an online estimate as a starting point, not a price.
Look at Comparable Sales
Comparable sales, or “comps,” are the foundation of how homes are valued. They’re recent sales of homes similar to yours, close to yours. Good comps are:
- Recent: Generally sold within the last three to six months
- Nearby: As close as possible, ideally in the same neighborhood. In Los Angeles, values can shift from one side of a boulevard or freeway to the other.
- Similar: Close in square footage, bedrooms and bathrooms, lot size, age, and style
- Sold, not listed: A list price is what a seller hopes to get. A sale price is what a buyer actually paid.
Pending sales are worth noting too, since they show where the market is heading, even though the final price isn’t public until closing.
Adjust for the Differences
No two homes are identical, so the next step is adjusting for what makes yours different from the comps. Common adjustments include:
- Condition and updates: A move-in-ready home sells for more than one that needs work.
- Size and layout: Square footage matters, but so does how usable the space is.
- Lot and outdoor space: Yard size, usable flat land, a pool, or outdoor living areas
- Location on the block: A quiet street versus a busy one, or a hillside versus a flat lot
- Parking: A garage, driveway, or street parking only
- Extra units: A permitted ADU or guest house can add value. Unpermitted space usually doesn’t count the same way, and it can complicate a sale.
Factor In the Current Market
Comps tell you what happened. The current market tells you what’s likely to happen next. Look at:
- How many similar homes are for sale right now, since they’re your competition
- How long homes like yours are taking to sell
- Whether recent homes sold above, at, or below their asking price
- Interest rates and the time of year, which affect how many buyers are active
What Doesn’t Determine Your Home’s Value
Some numbers feel important but don’t set market value:
- What you paid: Buyers pay what the home is worth today, not what you paid.
- What you need to net: Your plans for the proceeds don’t change what buyers will pay.
- What you spent on improvements: Most renovations don’t return their full cost at sale.
- Your property tax assessed value: Under California’s Prop 13, assessed values generally rise only modestly each year, so for long-time owners, the assessed value is often far below market value.
- Your neighbor’s list price: Until it sells, it’s just an asking price.
Online Estimate vs. CMA vs. Appraisal
There are three common ways to estimate value, and they serve different purposes:
- Online estimate: Automated, instant, and based on public data. Good for a rough idea.
- Comparative market analysis (CMA): Prepared by a real estate agent using detailed sales data, local knowledge, and your home’s specific features. It’s what agents use to recommend a list price.
- Appraisal: Prepared by a licensed appraiser, usually ordered by the buyer’s lender during escrow to confirm the home supports the loan amount.
For setting a list price, a CMA is usually the most useful tool, because it combines the data with an understanding of your home and your neighborhood.
How to Prepare for a CMA
You’ll get a more accurate analysis if you share details the data can’t show:
- A list of upgrades and repairs, with approximate dates
- Permits for additions, remodels, or ADUs
- The age of the roof, HVAC, water heater, and other major systems
- Anything a buyer might see as a drawback, so it can be accounted for honestly
Getting your documents together now also helps later with your seller disclosures.
Why Getting the Price Right Matters
Your home gets the most attention in its first few weeks on the market. Pricing too high during that window can mean fewer showings, a longer time on the market, and eventually a price reduction. If that’s happened to you, our guide on why a house isn’t selling walks through what to do next.
Related reading: why your house isn’t selling and what LA home sellers must disclose.
The Bottom Line
Online estimates are a fine place to start, but your home’s real value comes from recent comparable sales, adjusted for your home’s specific features and the current market. A comparative market analysis brings all of that together into a price you can list with confidence.
Curious what your Los Angeles home is worth in today’s market? I’ll put together a detailed comparative market analysis for your home, with no obligation to list. Contact me to request your CMA.
This article is for educational purposes only and is not an appraisal or legal advice. Please consult an experienced real estate attorney for legal questions.
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