We invariably value the worth of our house by the price of a nearby sale. In almost every case sellers tell me that “theirs is worth more.” Well there is more to the story. Buyers are traveling in a large circle around the area, 3 miles or more, comparing houses similar to yours. They are making their buying decision on a process of elimination and then are selecting the one that best suits their needs. It is then that the buyer looks at the prices and determines their offer. They only tangentially consider the sales price of the house up the street that you compared your house to. Instead they are considering the currently available houses in a 3 mile radius. That is why we Realtors say that the market determines the price.