April 23rd, 2017 10:38 AM by Ben Guyton
How much can you sell your home 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.
Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:Location: The closer to your house the 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 in 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’s finished), finishes, and yard size. Also, if your home is located within a neighborhood that offers New Homes you'll want to eliminate them as comps, or at least understand the difference that Buyers are willing to pay for new over existing homes. Your "used" home will not sell for a similar new home, so don't price it that way.Amenities and upgrades: Is the kitchen new? Does the comparable sale house have full A/C? Is there crown molding, 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 several 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.Sales sweeteners: Did the comparable-sale sellers give the buyers downpayment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.
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.
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 him or 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?It is very rare to find any homeowner that doesn't believe their home is the best, most special home in the neighborhood. Often our perception of value is driven by many other things than the things that matter to a Buyer. Emotional experiences you've had, or even that your home has bermuda grass when all other have centipede won't increase your home's value to a buyer.Lastly, be wary of any AVM evaluation. An Automated Valuation Model (AVM), like a Zestimate from Zillow, cannot accurately depict your value as it can't factor in condition or view for starters. Don't be fooled by these just because they're easily accessible. If you have questions or need assistance in have a evaluation done reach out to us anytime or simply go to www.mbhomevalue.com Have a great day!