The Ins and Outs of Comparable Sales
One of the most important steps in getting your house sold is determining the correct listing price for your house. If you price it too high it will most likely sit on the market with no offers. If you price it too low you might get a quick sale, but will be leaving money at the table. Checking the prices of comparable sales, or comps, in the area can be one of the most helpful strategies to use when pricing.
However, you have to make sure that you go through the process carefully to get it right.
Make Sure the House is Close a Match
Many homeowners make the mistake of looking at every comp that is within their area. The problem is houses can be pretty similar but still have some key differences that have a big impact on the value of the home.
When trying to determine what price you should list your house at, find the houses that seem the most similar and then compare the following features:
Lot size/acreage – this can have a big impact on the price of the house. Make sure the comps you look at are within half an acre of your lot size.
Square footage – Bigger houses typically can sell for more money. Only compare prices with houses that are similar in size to your house.
Location – Everyone has heard that the most important thing in real estate is the location. Houses in the same area can have very different values depending on what street they are on.
Number of Rooms – True comparable sales should have the same number of bedrooms and bathrooms as your house.
Condition – Two houses can be exactly the same size, but if one is 50 years old and hasn’t been properly maintained and the other is brand new, the value will be different. Look for houses that are in the same condition as your home.
Look at Current Prices
The further back you go when looking at comparable sales, the more skewed the numbers could be. If you want to find accurate pricing do not use comps that are more than 6 months old. The more recent the home sale the more accurate picture it will give you of the potential value of your home.
Cautious Look Online
To get a rough idea on what the value of your home might be you can look online. Digging deep in the local market research is the best way for you to get a clear picture on what the market is dictating as the value of your house.
Look at the Competition
Take some time to go scope out the competition yourself. When you find houses that are comparable to yours go to open houses to see what the house has to offer. This will help you see how your house actually compares.
Check Out the Sale Price
Make sure you are looking at how much houses in your area are selling for, and not just what they are being listed for. Sellers can list their house at any price they want, but the sale price will tell you what buyers are actually willing to pay for it.
While you are looking at the prices of the houses that are selling, don’t forget to look at the houses that aren’t selling. Do your best to determine how your house compares to these houses and why they aren’t selling. Looking at what does and doesn’t work when it comes to pricing will help you price your house correctly from the start.