AFC Accounting Fundamentals Practice Test – Complete Exam Prep

Consulting a real estate agent to assess comparable properties is the best method for determining how much a house can sell for. Real estate agents have access to a wealth of local market data and are skilled in analyzing recent sales of similar properties, which is crucial for establishing a market-based selling price. They consider various factors, including location, size, condition, and current market trends, to provide a well-informed valuation.

This method leverages the principles of comparative market analysis (CMA), where the selling prices of similar homes in the same area—often referred to as "comps"—are considered to gauge an accurate selling price for a property. This approach is more reliable than simply using estimates from online property valuators, which may not always reflect the most current market conditions or specific nuances of a property.

Adding the cost of upgrades to the original purchase price or incrementally increasing the purchase price based on the duration of ownership are both overly simplistic methods. They fail to account for the dynamic nature of real estate markets, which can be influenced by numerous factors beyond personal investment.