The most important aspect of listing your home for sales is the asking price. Unlike many other items we purchase, home prices are based on what a willing and able buyer would pay for the property. Sounds complicated, right? This is why real estate agents bring comps (short for comparable properties) information with them to the discussion. Yet are you using the right comps to successfully sell your home?
The idea is to gather information about comparable properties that have sold recently that are similar to your own. The goal is to compare apples to apples. In other words, the properties should be as close to the subject home as possible. This includes things like:
- Location – how far is the property from yours.
- Size – square footage is an important aspect of value.
- Number of bedrooms/bathrooms – even if the square footage is close, the number of bedrooms and bathrooms can have a large effect on price.
- Style, view, street, yard – even the exact same floorplan can have vastly different value based on the street it’s on or the view. Size of the yard and privacy are also critical components of value.
- Amenities – private or community pools and other amenities can affect value as well.
Your agent will bring recent sales for homes that compare to yours. As you look through these listings, you can add or subtract values based on the differences. This is the same process an appraiser will use to approve the loan. While this is more of an art than a science, the right comps can help you properly price your home for a smooth sale.
Have you ever priced your house too high for the market at that time and regretted it in the long run? What was your experience like?