The underlying philosophy of the comparables approach to value is that buyers will pay the same amount of money for roughly similar properties.
Minor differences between properties are unimportant. You would look at comparable properties and then adjust the sales price of the property you are valuating upward or downward depending on how it compares relative to the properties under consideration.
As an example, let us assume there have been several recent sales of three-bedroom, three-bath brick homes on quarter-acre lots within walking distance of an elementary school in a good school district.
Based on these comps, your foreclosure house is most like the first comparison property, except that your property lacks a fenced-in yard, enjoys a garage instead of a carport, and is in a little worse condition. Depending on the neighborhood, we would probably say that the garage on the foreclosure house is worth a little bit more than the fenced-in yard on the first comparison house, but not a lot.
Those two features probably cancel each other out for the purposes of estimating value. That leaves us with the first comparison house selling for $109,000. It was in fair condition, and our house is in poor condition. As a result, the highest value for the foreclosure property is $109,000, and you must discount that for how bad that “poor” condition really is.
Estimating value is that simple. You might have more points of difference, some of which will cause upward adjustments and some of which will cause downward adjustments in the estimate of your home’s value.
Just do like the professional appraisers, and take each difference in its turn, calculating how much up, and how much down. Then you do the simple arithmetic at the end to arrive at your own estimate of value.