Before you put your home up for sale, use the right
comparable sales to find the perfect price.
How much can your home go for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps) sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.
What makes a good comparable sale?
Your best comparable sale is the same model as your house in the same subdivision- that closed in escrow last week. If you cant find that, here are the other factors that count.
Location: The closer you are to your House is better, but don't just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and your school district.
Home Type: Try to find comparable sales that are like your home in style, construction, material, square footage, number of bedrooms and baths, basement(having one and whether it is finished), finishes, and yard size.
Amenities and Upgrades: Is the kitchen new? does the comparable sale house have full A/C? Is there crown moulding, a deck, or a pool? Does your community have the same amenities(pool, workout room, walking trails, etc.) and homeowners association fees?
Date of Sale: You may want to use a comparable sale from two years ago when the market was high, but that won't fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.
Sale Sweeteners: Did the comparable sale sellers give the buyers down payment assistance, closing costs, or a free television? You may have to reduce the value of any comparable sale to account for any deal sweeteners.
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 comparable, 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. They will have read 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 sales. Ask your real estate agent to be honest about your home and the other homes on the market, and then listen without taking the criticism personally.
Are Foreclosures and Short Sales Comparable?
If one or more of your comparable sales was a foreclosed home or a short sale (a home 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 hey are still distressed sales. The owners usually have to sell because they are divorcing, or their employer is moving them to Kansas.
How much a short sale is discounted from the market value varies among local markets. So you have to rely on your real estate agents knowledge of the local market to use a short sale as part of your comparable sale.
houselogic.com
Article by: Carl Vogel
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