RSS Blog FeedSelling Your Home? Know Your Comps!
Posted at 8:21 AM, Jan. 4, 2007
Pricing your house right from the start is always important, especially during a buyer's market. But how do you know what the right price is – that price that will make your house sell quickly and for the best possible price?One of the things you'll need to know is the comps. Comparable sales of houses in the same area in recent months are one of the factors that your Realtor® will take into account as you work together to set your price. Notice I said "sales" not "houses for sale." The price of other listings only tells you what other owners hope to sell their houses for. Sales tell you where the prices ended up; they tell you what real buyers actually paid.
Comps give you a starting point. Once you know what a house sold for you can look at the features of that house and compare it to yours. Then you make adjustments up and down to come to an approximate equivalent price. For instance, if another house has more square footage that might sell for more than yours, but a new kitchen or deck in your house will give it a higher market value. Again, this is where your Realtor's® experience will be invaluable in setting a price that reflects your home's condition and location.
Where do the comps come from? The data are collected from a variety of sources including the multiple listing service and public records of sales, by professionals who know the neighborhood and the specific market. One place they do not come from is an internet "estimating" site that is not based on solid, proven information. Several sites have sprung up over the last year that promise an estimate of the value of your home and every other one around. So far, they don't have a good record for accuracy or completeness. What they provide is nowhere near a true comp. Their computer data banks simply cannot make the considered judgments that only a human, in this case a Realtor®, can make to recognize the differences in details that lead to differences in pricing.
Comps can be valuable to sellers in setting the price, and also to buyers in understanding the price range in a particular area. But whether buyer or seller, always work with your Realtor® to get the best value.
Comments are welcome.
Thank you.
Michael Trust, Realtor® and Broker
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