"Determining how much a property is worth is challenging, because most real estate is worth different things to different people. A seller may see the home they have owned for decades as very valuable, for instance, while an investor looking at the same property with a professional eye may see a devalued and distressed piece of real estate. If you want to evaluate a property"s value - whether you are buying or selling -- you need to consider:
1) The prices of other homes in the same neighborhood. Other homes in the same community are a good indication of overall value and provide a good starting point for comparison. Some communities are simply more desirable and therefore have higher market values while others have problems that devalue homes in the area.
2) The condition of a home. Comparing the condition of a home to other homes in the same area is also a good point of comparison. For example, if one home in an upscale area has not been maintained and needs renovation and work, that home will be worth than its neighbors, in many cases.
3) The size of a home. A property that is larger or smaller than its neighbors must be valued up or down accordingly. A home with a larger than average lot may also be worth more than other like homes in a community as well. In the same vein, amenities need to considered. A home with a pool, spa, or other desirable amenities or additions may be considered more valuable than other homes of the same size and condition in the neighborhood.
4) Your desire for a home or your desire to sell a home. If you want to buy a home very much, you may want to place a larger bid. The home is worth more to you if you really want it. Similarly, if you are trying to sell a home and need money quickly due to financial pressure, you may need to accept a lower offer in order to ensure fast cash."