I've gotten the exact question so many times, that I've decided to answer the question as thoroughly and completely as possible.

The easiest way to figure out the value is to check the "comps" -- or comparable properties that have sold recently. That is- how much have similar (comparable) homes sold for recently?

One great resource is Zillow.Com- it's a great site to check what homes have sold recently, and Zillow.Com will even give you their own "guess" as to what the property is worth, even show you an aerial picture.

But be careful- DON'T TRUST ZILLOW'S VALUE! Just use them to tell you what other homes have sold for recently. If there are plenty of sales, all within a particular price range, then apply this little formula:

Comps Formula

1. Houses that have sold within 1 year

2. Houses that are within 20% of the same square footage

Now simply average the remaining sales, and voila- you have your comparable value! Now, without actually seeing the "comparable" houses, you don't know if it's actually comparable- you'll have to go look to be absolutely sure, but this is a simple "guideline" price.

If you have a property where the comps vary in value by a LOT, you have to do one additional step. Here's the breakdown of how to determine the value of a property with values all over the map (like the one you're dealing with).

First, get a list of recent sales within 1 mile of the subject property. Here's one I pulled from zillow for a student's property. It might be a little over a mile, I had to guess from looking at a map):

The result:

XXX Leeward Ln 3 2.0 1,386, 1969 SF 09/01/1992

968 Leeward Ln $32,752, 3 2.0 1,386 -- 1981 SF 10/05/2006

9393 Windy Ct $110,700, 3 2.0 1,922 -- 1976 SF 12/28/2006

9396 Ridgewood Ter $120,000, 3 2.0 1,640 -- 1986 SF 09/21/2006

767 Four Winds Ln $114,600, 3 2.0 750 -- 2000 SF 01/12/2007

9429 Citrus Ct $102,000, 3 2.0 1,515 -- 1985 SF 01/30/2007

9479 Bywood Ct $86,000, 3 2.0 1,484 -- 1986 SF 12/14/2006

Ok, so now, you have to eliminate anything more than 20% bigger or smaller than the subject property. That means, for this 1386sf example, 1,108 - 1,663 square feet are the comps.

So that leaves:

The result:

XXX Leeward Ln 3 2.0 1,386 -- 1969 SF 09/01/1992

968 Leeward Ln $32,752, 3 2.0 1,386 -- 1981 SF 10/05/2006

9396 Ridgewood Ter $120,000, 3 2.0 1,640 -- 1986 SF 09/21/2006

9429 Citrus Ct $102,000, 3 2.0 1,515 -- 1985 SF 01/30/2007

9479 Bywood Ct $86,000, 3 2.0 1,484 -- 1986 SF 12/14/2006

9530 Autumn Ct $105,900, 3 2.0 1,536 -- 1986 SF 02/05/2007

9274 Brown Rd $235,975, 3 1.0 1,414 766,656 1953 SF 02/21/2007

From 21 properties, now we're down to eleven. Now, take the highest and the lowest sales price, and eliminate them. That means the $32,752 sale and the $235,975 sale are gone, so we're left with:

The result:

XXX Leeward Ln 3 2.0 1,386 -- 1969 SF 09/01/1992

9396 Ridgewood Ter $120,000, 3 2.0 1,640 -- 1986 SF 09/21/2006

9429 Citrus Ct $102,000, 3 2.0 1,515 -- 1985 SF 01/30/2007

9479 Bywood Ct $86,000, 3 2.0 1,484 -- 1986 SF 12/14/2006

9530 Autumn Ct $105,900, 3 2.0 1,536 -- 1986 SF 02/05/2007

9583 Briar Creek Ln $132,000, 3 2.0 1,408 -- 1983 SF 01/26/2007

9581 Washington Cir $161,600, 4 2.5 1,140 -- 1999 SF 02/05/2007

Now, two things need to happen. First, average all of these, and you'll have a pretty good estimate of value. In fact, this is just about how an appraiser would start.

Average Sales Price: $126,500

Second thing that needs to happen now, is you would need to go look at the so-called comps, and see if they are actually comparable. That's what an appraiser would do.

Now, for purposes of knowing whether or not to follow up on a deal, you don't have to do that. Just run the comps, + or - 20%, knock off the highest and the lowest, and average them.

But, once you decide to do a particular deal, AFTER you sign up the deal with the seller, while you're still in the neighborhood, go look at those addresses and decide which are true comps.

So, let's imagine that Sedgwick Dr, Castlebrook Dr and Washington Cir are NOT comparable because they are much newer, built in the last 8 years instead of 1969 like the subject property.

Then the average value of the older homes, once those three are removed, would be:

The result:

XXX Leeward Ln 3 2.0 1,386 -- 1969 SF 09/01/1992

9396 Ridgewood Ter $120,000, 3 2.0 1,640 -- 1986 SF 09/21/2006

9429 Citrus Ct $102,000, 3 2.0 1,515 -- 1985 SF 01/30/2007

9479 Bywood Ct $86,000, 3 2.0 1,484 -- 1986 SF 12/14/2006

9530 Autumn Ct $105,900, 3 2.0 1,536 -- 1986 SF 02/05/2007

9583 Briar Creek Ln $132,000, 3 2.0 1,408 -- 1983 SF 01/26/2007

823 Four Winds Ln $120,000, 3 2.0 1,594 -- 1984 SF 01/03/2007

Average Value (Eliminating Newer Homes): $110,983

Of course, that last example is a hypothetical, you won't know until you go and look, but you can do just the true "comps search" FIRST, just to see if there's any reason to even get involved.