How Do You Effectively Use Comparable Sales to Sell Your Home?
Trying to find the perfect price for your home can be extremely difficult, but in this case we will try and break it down for you. These tips on how to use comparable sales will help you with how you should be pricing your home before you put that FOR SALE sign in your front yard (or online).
Look for similar, recently sold real estate near you. The first questions a seller usually asks them self is “How much is my home worth right now, and how much could I sell it for today?” Comparable Sales work by comparing your home to similar homes. This is very effective when staying within the neighborhood of recently sold homes that are similar in size and look to get a closely estimated price to how much your home would sell for. There are also other factors that play into the pricing of your home such as: Location, Home types, Amenities and Upgrades, Date of Sale, and Sales Sweeteners to name a few!
Location, Location, Location. The location of your home where it stands may benefit or deduct from the base price you are trying to sell your home for. An example is if you are living in an upscale area with low crime rate and the neighborhoods homes seem to be kept in good condition, then the price you are asking for may even be increased slightly geared towards anyone (especially families) looking for a safe place to move into. Looking at the other side of things, impoverished, run-down areas with a higher crime rate may not be the best choice, but to get the sale the price may have to be reduced. Also, looking for homes closer to your own is better whether it is in the same neighborhood or district to show consistency in sales prices.
What’s your type? What kind of home do you live in and what makes it comparable in price to those around you? Whether it be the building materials, how large your home is, if you have a yard, or even if it has a basement. Looking at the structure of a home that is very close to your own is the best route to go!
Modern Design, or Stuck in the Past? Kitchen remodeled? New flooring? New installments? Great! Upgrades can have a huge impact on how much your home is worth now. Even the “smallest” upgrade can add a large value to your home’s current price.
Got Amenities? When you live in a community based area, amenities play a part in the pricing. Making sure that the communities homes have the same pool, trails, and homeowner association fees is a huge plus to consistency and pricing.
You’ve Got A Date With Sales. The real estate market has times in a year where prices fluctuate, and depending on the time of the year and what the market is doing with home pricing (like yours) your asking price might have to lower or may be increase to go with the flow!
Sweeten the Deal. Have something extra in your home or going about the process you’d like to throw in? Do it! Sales sweeteners such as giving free furniture, paying for closing costs, or helping with down payment assistance is a great way to keep a home buyer hooked into your home. Remember though, your comparable sales you are looking at would reduce by the amount of every deal sweetener!
Some topics and frequently asked questions on www.houselogic.com on this same subject may help you too if you have any questions or concerns! They are as follows:
Agents can help adjust price based on insider insights
Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or a basement office—is one of the ways real estate agents add value.
An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.
More ways to pick a home listing price
If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to her without taking the criticism personally).
Next, put your comparable sales into two piles: more expensive and less expensive. What makes your home more valuable than the cheaper comparable sales and less valuable than the pricier comparable sales?
Are foreclosures and short sales comparables?
If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.
A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.
Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell because they’re divorcing, or their employer is moving them to Kansas.
How much short sales are discounted from their market value varies among local markets. The average short-sale home in Omaha in recent years was discounted by 8.5%, according to a University of Nebraska at Omaha study. In suburban Washington, D.C., sellers typically discount short-sale homes by 3% to 5% to get them quickly sold, real estate agents report. In other markets, sellers price short sales the same as other homes in the neighborhood.
So you have to rely on your real estate agent’s knowledge of the local market to use a short sale as a comparable sale.