How We Calculate Your Property’s Value
At King Sanders, we believe in transparency and fairness when determining your property’s value. Whether your property is move-in-ready or a fixer-upper, we use industry-standard methods to ensure you receive a fair and competitive offer.
Move-in Ready Property Evaluation
If your property is in good condition and doesn’t require major repairs, we use a more traditional valuation method. Unlike fixer-uppers, move-in-ready properties often sell at, near, or even above their After Repair Value (ARV).
How Move-In Ready Properties Are Valued
We conduct a Comparative Market Analysis (CMA) to determine your property’s Fair Market Value (FMV). This process involves comparing your home to recently sold properties in your area with similar features.
Example Calculation
Your property: 2,150 sqft, well-maintained with no major repairs required.
| Similar Home | Sale Price | Size (sqft) | Condition | Days on Market |
|---|---|---|---|---|
| A (Sold 2 months ago) | $390,000 | 2,100 | Recently Updated | 21 Days |
| B (Sold 1 month ago) | $405,000 | 2,200 | Move-in Ready | 15 Days |
| C (Sold 3 weeks ago) | $410,000 | 2,150 | Renovated | 18 Days |
| D (Sold 6 weeks ago) | $395,000 | 2,100 | Move-in Ready | 20 Days |
| E (Sold 2 weeks ago) | $400,000 | 2,200 | Slightly Upgraded | 17 Days |
After analyzing these comparable properties, we determine the Fair Market Value (FMV) of the seller’s home to be $400,000.
Factors We Consider in a CMA
✔ Square Footage – Larger properties typically sell for more, but layout and usability also matter.
✔ Number of Bedrooms & Bathrooms – More rooms and updated bathrooms generally increase value.
✔ Lot Size – Larger lots, corner lots, or those with unique features can command higher prices.
✔ Property Condition – Updated kitchens, modern finishes, and well-maintained homes tend to sell for more.
✔ Amenities – Features like pools, garages, and smart systems can impact the final price.
✔ Location – Proximity to good schools, shopping centers, and major highways influences desirability
Fixer Upper Property Evaluation
For properties that need repairs or renovations, we follow a widely used method in the real estate investment industry called the 70% Rule.
What is the 70% Rule?
The 70% Rule helps determine the price an investor should pay for a property to ensure a profitable resale. The formula is:
Purchase Price = (ARV×0.7) − Repair Costs
Example Calculation
If a property’s ARV (After Repair Value) is $200,000 and it needs $10,000 in repairs, the offer under the 70% Rule would be:
(200,000×0.7) − 10,000 = 130,000
Important Notes for Sellers
This formula is only for distressed properties. If your property is move-in-ready, it won’t follow this model.
The 70% rule isn't a strict price limit. It is not uncommon for distressed properties to sell for more than this amount.
The 70% rule is not a one-size-fits-all formula. It varies based on the market and property. In places like California, it can rise to 80% or even 85%, allowing sellers to walk away with more.
Accurate repair estimates are key. If unexpected repairs arise during due diligence, buyers may lower their offer or back out of the deal completely.
Repair costs vary by location. Materials and labor costs in California are higher than in Idaho, so adjustments are made based on local market pricing.
More About How We Determine Your Property’s Value
Every Property is Unique: We assess the details you provide, along with public records, to create a custom valuation for your property.
Properties in Good Condition Sell for More: If your property is move-in ready or doesn’t require major repairs, it may be sold at, near, or even above its After Repair Value (ARV)—unlike distressed properties that follow the 70% Rule for investors.
Comparing Similar Property Sales: We analyze recent sales of properties similar to yours in size, condition, location, and features to determine a competitive price.
Market Trends & Demand: If properties in your area are selling quickly, your property’s value may increase. If the market is slower, we factor in the added risk for buyers.
Online Valuation Tools vs. Reality: While sites like Zillow or Realtor.com provide automated property values, these tools don’t account for needed repairs, market conditions, or specific property details—so your actual offer may differ.
Online Valuation Tools: Sites like Zillow and Realtor.com provide rough estimates but often fail to account for necessary repairs or unique property features.
Professional Appraisals: Hiring a licensed appraiser provides the most accurate property valuation if you want an independent assessment.
Have Questions? We're Here to Help!
Whether you're ready to sell, looking for your next property, or just need expert guidance, we're here to make the process easy and stress-free. Reach out today—no pressure, no obligations, just real answers from real people who care about your success.