How to Determine Fair Market Value of a Home

Compare your home to other similar houses in your area. Research MLS.com or simply drive around your area and pay attention to things like square footage, age of the house, selling prices and the percentage of asking price they received. Real Estate agents will have the best access to this type of information, but if you don't have one you can use websites such as zillow.com, homes.com or homevaluehunt.com. They won't be quite as accurate as MLS.com but will still provide you with quality information.

Prepare a Comparative Market Analysis or have your agent prepare one for you. This will include statistics such as recent sales, information on houses sold in the past six months and similar active listings. As of June, 2010 you can purchase a Comparative Analysis Report for your area from MLS.com for $14.95.

Determine the average cost per square foot for similar homes in your area. To calculate this figure, find a handful of homes that have sold, add up the square footage and divide by the number of homes to figure out the average square footage. Find the prices they sold for, add them up and divide by the number of homes to find the average price. Then divide the average house price by the average square footage to get the average price per square foot. If you are selling, you can multiply that by the square footage of your home to get the price

Evaluate trends in the real estate market in your area. This can include whether it is a buyer's or sellers market, average interest rates, average days homes have been on the market before selling, and whether they sold above or below the asking price. Your agent can provide this information. You can also find help on different real estate website resource sites. (See Resources)