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Step one: choose comparables carefully
Begin with homes that sold recently, ideally within the past six months, close to the subject property and similar in size, age, style and lot. Sold prices matter more than asking prices because they show what buyers actually paid. Aim for three to six comps and note why each belongs. Worked example: for a three-bedroom ranch of 1,600 square feet, pick sales of two- to four-bedroom ranches between 1,400 and 1,800 square feet on nearby streets, and set aside a larger two-story house across a busy road.
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Step two: adjust for real differences
No comp matches perfectly, so compare features and adjust. Consider bedrooms, bathrooms, square footage, garage, condition, updates and lot. Adjust the comp toward the subject: if a comp has a finished basement and yours does not, lower the comp's value by a reasonable amount. Worked example: a comp sold at 410,000 with a renovated kitchen; your kitchen is original, so you reduce that comp by an estimated kitchen difference, perhaps 15,000, giving 395,000. Document each adjustment so someone else can follow your reasoning and challenge it.
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Step three: turn comps into a range
After adjusting, look at how the figures cluster. Give more weight to the comps needing the fewest changes and the most recent sales. Present a range rather than a single number, and say what could move it, such as condition surprises or a shifting market. Worked example: adjusted comps of 388,000, 395,000 and 402,000 suggest a working range of roughly 388,000 to 402,000. Treat it as a starting point for a conversation with an agent or appraiser, who can verify details and confirm the final price.