Here are two options for getting your home value estimate:
OPTION 1. DIY Home Value Estimate: You can create a reliable home value estimate using this step-by-step formula to determine your property’s current market value. We’ve included a calculator below to assist you with your DIY calculation. This guide will teach you the following:
- Home value formula: a simple breakdown of the formula appraisers use to determine home values.
- How-to guide to: pick the right comparable sales, adjust for time and feature differences, reconcile to a single number, plus two quick cross-checks to sanity-check your result.
OPTION 2. Quick online home value estimate: Get a online estimate to compare with your DIY result, Offerpad can get you a free cash offer home value estimate in just minutes.
DIY CALCULATOR:
Estimate Your Home’s Value
Choose how you’d like to estimate: the easy way or the advanced way.
Simple Home Value Calculator
Enter up to three recent home sales near you. We’ll adjust for time and small differences, then average the results.
Sale A
Sale B
Sale C
Average of the three adjusted sales (skipping blanks).
Advanced Home Value Calculator
Use up to six comparable sales. Adjust for market changes and custom feature differences. Weighted results included.
Weighted average based on your comparable data.
Formula Key & Definitions
- V̂
- Estimated home value based on adjusted comparable sales and weights.
- Pᵢ
- Recorded sale price of comparable home i (before any adjustments).
- tᵢ
- The date the comparable home sold. Used for time adjustment with HPI data.
- HPI(today)
- The current House Price Index for your area, used to bring older sales up to today’s market level.
- HPI(tᵢ)
- The HPI level at the time comp i sold. Together with HPI(today), it helps you adjust for time changes in the market. You can find your local HPI using the Federal Housing Finance Agency (FHFA) website, which offers an online tool to look up housing price trends by city, state, or ZIP code. Just visit fhfa.gov/HPI and search for your area’s latest index value.
- vₖ
- The contributory market value of feature k, such as size, condition, upgrades, or view.
- Δᵢₖ
- The difference in that feature (k) between the comp and your home. Positive if your home is superior, negative if inferior.
- wᵢ
- The weight assigned to each comp, showing its relative similarity and reliability. The most similar comps get the highest weight.
- Net Feature Adjustments
- The total dollar adjustments made to each comp for feature differences before applying weights.
- Time-Adjusted Price
- The comp’s sale price adjusted for time using the ratio of current HPI to HPI at sale.
- Adjusted Price
- The comp’s time-adjusted price plus or minus the net feature adjustments.
- Weighted Value
- The adjusted price multiplied by its weight. All weighted values are averaged to reach the final estimate.
What is HPI (House Price Index)?
The House Price Index, or HPI, is a number that tracks how home prices change over time in different parts of the country. Think of it like a “score” for your housing market — when the score goes up, it means home prices in your area have generally gone up too. When it goes down, prices have fallen. You can find your local HPI using the Federal Housing Finance Agency (FHFA) website, which offers an online tool to look up housing price trends by city, state, or ZIP code. Just visit fhfa.gov/HPI and search for your area’s latest index value.
The Offerpad DIY Valuation System in 5 steps
This is a homeowner-sized version of the sales comparison approach that most appraisers rely on for single-family homes. You will time-adjust each sale using a house price index, make market-based feature adjustments, then reconcile your adjusted comps.
Home Value Formula
Step 1: Choose Comps
Pick 3 to 6 recent closed sales that are similar in location, size, age, and features. These are your comparables.
Step 2: Time Adjust
Adjust each sale price to today using a local FHFA House Price Index value for your area.
Pᵢ(t) = Pᵢ × HPI(today) / HPI(sale month)
Step 3: Adjust for Features
Use paired sales to estimate dollars per square foot for size and matched pairs for beds, baths, condition, view, or upgrades. Add to comps that are inferior to you and subtract from comps that are superior.
Step 4: Reconcile Value
Combine adjusted comps with similarity weights to reach a single estimate.
V̂ = Σ [ wᵢ × ( Pᵢ × HPI(today)/HPI(tᵢ) + Σ ( vₖ × Δᵢₖ ) ) ] ÷ Σ wᵢ
Offerpad DIY Home Value Estimate gives you confidence, clarity, and control.
Use this as a guide. For a formal appraisal, consult a state licensed appraiser.
Step 1) Pick true comparables
- Choose 3 to 6 closed sales that are most similar to your home.
- Same neighborhood or school area when possible.
- Similar style, size within about 15 to 20 percent, age, and lot utility.
- Prefer sales from the last 3 to 6 months. Expand only if needed and note why.
Step 2) Time-adjust each sale to today
Markets move. Bring older sale prices forward or backward to your valuation date using a local house price index.
Pᵢ(t) = Pᵢ × HPI(area, today) / HPI(area, sale_monthᵢ)Use the FHFA House Price Index at the metro, county, ZIP, or even census-tract level. The FHFA HPI is a transparent repeat-sales index designed for measuring price trends. Time adjustments should be supported by evidence.
Step 3) Derive market-based adjustment amounts for differences
- Living area adjustment: use a paired-sales slope from your comps. Pick two similar sales that mainly differ in size and compute dollars per square foot from their price difference divided by their size difference.
- Other features: for beds, baths, garage, pool, view, condition, energy upgrades, use matched-pair logic. Estimate each feature’s contributory value from similar sales where the feature is the main difference.
- Concessions: reflect market reaction to seller-paid points or credits when they meaningfully affected the price. Avoid automatic dollar-for-dollar unless market evidence supports it.
Step 4) Compute each comp’s adjusted price
AdjPriceᵢ = Pᵢ(t) + Σₖ (vₖ × Δᵢₖ)Where vₖ is the market-derived dollar value for item k and Δᵢₖ is how the comp differs from your home. Add if the comp is inferior to you. Subtract if the comp is superior.
Step 5) Reconcile to a single value with transparent weights
Not all comps are equal. Give the most similar comps more weight and average them.
V̂DIY = [ Σ wᵢ × AdjPriceᵢ ] / [ Σ wᵢ ]Simple weighting idea for homeowners: start each comp at 1.0. Subtract 0.25 if size differs by more than 10 percent, 0.25 if age differs by more than 10 years, 0.25 if it is outside your micro-location, 0.25 if lot utility or view differs a lot. Keep weights at or above 0.25. Then explain why your top comp got the most weight. This mirrors professional reconciliation practice.
The complete DIY formula
V̂DIY =
Σᵢ wᵢ [ Pᵢ × HPI(today)/HPI(tᵢ) + Σₖ (vₖ × Δᵢₖ) ] ÷ Σᵢ wᵢWhere: Pᵢ is the recorded sale price of comparable i at date tᵢ, HPI is the FHFA index level for your area, vₖ is the contributory value you infer from market data, Δᵢₖ is the signed difference for item k, and wᵢ is your similarity weight.
Worked example with simple numbers
Subject: 2,000 sf, similar features to nearby sales.
- Comp A sold 5 months ago for 500,000. Local HPI up 2 percent since then so PA(t) = 500,000 × 1.02 = 510,000.
- Comp B sold 2 months ago for 530,000. Assume flat since then so PB(t) = 530,000.
- Comp C sold 4 months ago for 495,000. Local HPI up 1.5 percent so PC(t) = 495,000 × 1.015 = 502,425.
Size adjustment slope from paired sales:
- Using A at 1,950 sf vs B at 2,050 sf: ΔP = 20,000, Δsf = 100 so about 200 per sf.
- Using A vs C at 1,900 sf: ΔP = 7,575, Δsf = 50 so about 151.50 per sf.
- Average the two so vsf is about 175 per sf.
Apply size adjustments:
- A vs subject: add 50 × 175 = 8,750 so Adj A = 518,750.
- B vs subject: subtract 50 × 175 = 8,750 so Adj B = 521,250.
- C vs subject: add 100 × 175 = 17,500 so Adj C = 519,925.
Weights: all three very similar so use equal weights at 1.0.
DIY value: V̂DIY = (518,750 + 521,250 + 519,925) ÷ 3 ≈ 520,000.
Quick cross-checks
1) Rent check using GRM
Compute a typical gross rent multiplier from rental comps, then multiply by your home’s market rent for a ballpark value. Include the calculation in your notes.
2) Cost-based reasonableness check
For newer or unique homes, sanity check with a simplified cost approach. Estimate replacement cost new from local builder quotes, subtract depreciation, then add site or land value from land sales or extractions. Most existing single-family homes still lean on the sales comparison approach for the primary indicator.
Common pitfalls to avoid
- Skipping time adjustments when the market moved. Time adjustments must be supported by market evidence.
- Using arbitrary feature adjustments. Let matched-pair comparisons show market reaction.
- Ignoring concessions. The correct adjustment reflects the market’s reaction, not a mechanical dollar-for-dollar unless supported by data.
- Averaging without explanation. State why your best comp got the most weight and reconcile to a single number.
What market value means and why your date matters
Market value is the most probable price in an open, competitive sale as of a specific date with typical motivations and cash-equivalent terms. Your time adjustment step aligns all comps to that date.
Want a second set of eyes
Hi, we are Offerpad. Our passion is making life simpler when you sell or buy. If you want a fast data point to compare with your DIY result, you can request a competitive cash offer in minutes or explore listing the easy way with our local experts. You choose your best way to sell. Freedom, simplicity, peace of mind.
References
- FHFA House Price Index overview and geography coverage.
- Fannie Mae Selling Guide sections on sales comparison, time adjustments, reconciliation, and cost or income approaches.
- Zestimate accuracy statements on on-market and off-market median errors.
