How Do I Know if the Price is Reasonable Without Hiring an Appraiser?

Here’s an uncomplicated method of ball-parking the right price for a home or condominium.

Palm Coast, FL – March 5, 2010 – What is a house or condominium worth in today’s real estate market? If selling, what price should I reasonably expect? If buying, what price should get the sellers attention without being too high? One of my consulting clients suggested a method to me that makes a lot of sense.
The most common method of determining prices is based on a comparison of the subject property (That’s the house for which you want to find the price) with similar properties that sold recently in the nearby neighborhood. The actual selling price of each comparable property (called comp for short) is adjusted up or down to "make it more like" or more comparable to the subject property. For instance, if the subject property has a pool and the comp doesn’t, the value (not the cost) of a pool is added to the selling price of the comp for comparative purposes. If the subject house does not have a pool but the comp does, the value of a pool is subtracted from the selling price of the comp. Similarly, the selling price can be adjusted upward or downward for other differences; location, condition, upgraded features, etc. The price per square foot of the subject property is determined by comparative analysis of the price per square foot (after adjusting actual selling prices) of the comps.
The accuracy of this method is highly dependent on two key factors:
  • The choice of comparable properties – Sometimes there are not enough sales of similar homes in the immediate area to make a fair comparison.
  • Adjustments – If not done by a professional, adjustments can be too subjective.
There is another way. It’s based on the property’s assessed value. That’s the line on the property appraiser’s website described as "Just (market) Value."
I use this number because the appraiser’s office makes the adjustments every year for all properties, not just the ones that sold. The property appraiser is responsible for making sure that the relative value of two properties is correctly portrayed on the tax rolls. To do this, the property appraiser annually determines the Just Value of every property based on the actual selling prices of like properties during the previous year.
If you the subject property is in Flagler County, go to the Flagler County Property Appraiser website. Search records/by name (or address) to find the subject property record.
Note: I’m in Florida. Not all states require assessed values be reviewed annually. If your state doesn’t, this method won’t work as well.
Here is an example of how it works. I’ll evaluate my own home in the Grand Haven subdivision in Palm Coast. Its Just Value is $334,115. The first step is to pick a recent time period. I used three months, yielded thirteen sales. Then find all homes that sold in Grand Haven during that time period. If the subject property is not "distressed," (short sale or bank-owned) then don’t include the actual selling price of distressed comps.
For each home, write down the selling price and the Just Value. Then divide the actual selling price by the Just Value. Don’t be worried that the Just Value is outdated because of the one-year delay in assessing. (2009 assessments are based on 2008 sales.) It’s only important that all assessments are set at the same time (they are in Florida).
Here are the results of my exercise (LO = Lender-Owned, SS = Short Sale):
Grand Haven Price Index


Just Value

Sold Price

Price Index

Distress Code

 Subject Property



18 Flamingo Ct





43 Eastlake Dr





9 Augusta Tr




43 St Andrews Ct





15 Shinnecock Dr





53 Riverbend Dr




49 River Trail Dr




5 Players Circle




44 Crosstie Ct




3 Village View Dr




16 Village Dr




46 Front St




97 Front St






A clear pattern emerged. Several indices are tightly grouped around the median 1.2 (distressed properties excluded). In other words, my house should sell for a price approximating Just Value multiplied by 1.2,  or $400,938. Between 1.1 and 1.3 may be justified because of interior differences which the property appraiser would not see, but any price substantially above or below that range would be hard to justify. Listing a property substantially above the index will result in few showings. Trying to buy substantially below the index will probably be fruitless. Once I’ve determined the Grand Haven index , I can use it to quickly determine a reasonable price level for any home in Grand Haven. 
If a clear pattern did not emerge, I would go back a few more months to pick up additional comps. This is what I’d do if I were evaluating a distressed property because my three-month sample yielded only four distressed comps.
Just Values are revised each year. Of course you should re-compute your indexes when that happens. Prices in some subdivisions or communities may rise faster or more slowly than others.
I looked at two other subdivisions.
Quail Hollow
  • There were 11 short sales – median index = .88
  • Of 17 homes, only three were not distressed sales – median index = 1.20
Pine Lakes
  • Non-distressed homes – eleven homes – median index = 1.16
  • Eight short sales with a median index = .90
  • Four lender-owned homes with a median index = .775
The adjustments are done by the property appraiser’s trained staff with no agenda. There is no need to compare two homes feature by feature, adding and subtracting along the way. It’s easier to find comps because they don’t need to be so similar to the subject house.  It’s another tool to help buyers, sellers, and real estate practitioners do a quick reality check without having to worry about the value of a pool, an oversized garage, pavers, or a tile roof. It might be used to justify your offer to a seller.

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9 replies
  1. Lauren
    Lauren says:

    Just Value

    shouldn’t our just value and assessed values be different? The assessed value should be about 85% of the just value. It seems like the numbers in the tax record are often the same. This tens to lead people to make lower offers based on these numbers.

  2. George Meegan
    George Meegan says:

    Market value

    That is what properties sell for. The seller and the buyer do all the looking and copairing then attempt to find a reasonable value. The Market price it sells for is the highest price a willing buyer will pay.
    The Buyer broker should do all the work showing comperables,for the buyer. The selling broker should do all the comperables, then the retrospective part is done.
    The prospective analysis is that of the time table required by the seller and buyer. If the interest rates were going up, both parties would probably hurry to get the deal done. But if they were coming down, both would waite, as cost would be less for the buyer and the seller could get more.

  3. Bob Wynn
    Bob Wynn says:

    Direct Intracoastal down 20%

    Hi Don….the appraiser office revalued the river property here in Ormond Beach on average the home price didn’t change but the land value went down by $225,000 and the taxes are higher then last year what happened

  4. Lauren
    Lauren says:

    reply back

    My home is homesteaded and it is the same number to the penny for both the just value and the assessed value. The majority that I searched were the same way. Just always thought the assessed should be for taxes and the just for current market value.

  5. Toby
    Toby says:

    Reply to Lauren

    Just value and assessed value are the same if the property is not homesteaded. If homesteaded, just value can rise more than the limits set on assessed value increases by the Save Our Homes amendment.

  6. Toby
    Toby says:

    Reply to Bob

    The Property Appraiser does not set the tax rate. The appraiser only adjusts value so that all assessments are fair, one to the other. If your home is homesteaded, the taxable assessment cannot go up more than 3 percent or the CPI, whichever is smallest.The tax increase comes from your elected officials. They divide the budget by the total taxable assessment to get the millage rate. The millage rate can go up a lot. That’s why your taxes rose even though the taxable assessed value did not.

  7. Toby
    Toby says:

    Reply to Lauren

    Here’s how it works. Just value and assessed value would be the same if it were not for the Save Our Homes amendment. They start out equal when you homestead. If the value of your home rises more than the lesser of 3% or the CPI, just value will rise with the market while the limits on the increase of assessed value will hold it down. In a fast rising market, that difference will grow. When the market turns around and prices fall, just value will drop with the market. But if there is still a difference between assessed and true value, assessed value will rise. The rise will still be limited. If just value drops to equal assessed value if the market continues to decline, they will drop together. Assessed value will never be higher than just value.

  8. Toby
    Toby says:

    Reply to Jim

    Deriving a comp when there are no sales presents a problem. One year ago, nobody could have predicted the bottom at Conservatory would be so low. I suggest two approaches; 1. Look at the ratio (index) using listing price rather than selling price. With no sales, it’s a given that the lowest list:Just Value index is still too high. That tells you it must be lower. 2. Try to find some other property that has similar attributes where there are sales – maybe Canopy walk and apply the Canopy Walk index to Marina Cove. But the further you get from true sales based comps, the less precise your result.

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