Before you put your home up for sale, use the right comparable sales to find the perfect price.
|A house is comparable to yours in price if it’s in the same neighborhood, on a similar street, and in the same school district. South Padre Island can vary greatly depending on whether the property is on the beach, the bay, or in the interior. Port Isabel, Laguna Vista, and Bayview all have waterfront properties that can be priced higher than interior properties.|
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.
What makes a good comparable sale? 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:
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 REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.
We would like to add that the National Association of Realtors statistics support the idea that the longer a home is on the market, the lower the selling price of the property will be. Statistics prove that pricing the property right in the beginning will bring your sellers a quicker, more profitable sale. The first 30 days will bring you the best price. Between 4-12 weeks, the sales price usually drops by 4.9%, 13-24 weeks drops by 6.4%, and more than 24 weeks usually drops by 10%. It is so important to price it right in the beginning.