Pricing your home properly, before it ever goes to market is one of the biggest keys to reaping the profit that you wish to gain, and moving it quickly, so that you can move on to your next residence. The most effective way to arrive at a competitive price is to compare it against like properties in your neighborhood, city and county.
Overpricing your home can leave it sitting while like homes are long sold. Under pricing may help you move it faster but you can leave thousands of dollars on the table if you don’t have a true value of your home. A tool used by realtor is to look at comparable homes to determine the value of properties, like yours, that they list for sale. A comparable, is a home that is in a like location with features that are identical or close to the same.
What to Compare
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- Type of Home – Do you have a three-bedroom ranch or a condominium, three bedrooms or five? When looking for real estate comps find a home that is as close to yours as possible, regarding features, by comparing the following aspects of the home.
- Location – Your neighborhood may not have a home that is close to yours in size, type and features, so you will need to search a wider area for a comparable property.
- Lot Size – Land, all by itself, has a value and the size of your lot is a factor when pricing your property. When you are comparing homes, consider the lot size as one variable of the value of one property over the other. Sold by the acre, and often measured by square footage, if a property has a lot size that is within a half an acre, larger or smaller, than yours you will need to make an adjustment for it when considering a selling price for your home.
- Number of bedrooms and baths – The number of bedrooms and baths can affect the price, even if square footage is equal. Location of rooms is also a factor in floor plans as buyers find split floorplans with separate bedrooms with in suite baths more favorable than homes without the same feature, even if it is larger.
- Square footage – Homes sold in an area have price per square foot average. You adjust a real estate comp based on your local average per square foot, which can be found here for many cities, with Tampa, FL used as an example.
- Special amenities – If one of the comparable homes that you find has a pool, determine the cost for one in your area and deduct it from the price of your home. The same goes for sunroom’s, garage size, and gourmet kitchens, outside kitchens, separate tubs and showers, and so on, will need to be factored in.
- Age – is relative but you should stay within five years of your home when figuring real estate comps. An older home may have as much value if it is in pristine condition with newer updates. The same applies to your home; the condition of it can be as big a deal breaker or maker as other factors.
Now, Go Find Those Comparable Homes
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Using the above parameters, do an online search with Movoto and find three homes in your area that have comparable features to your home. Using three homes should give you a good idea of your home’s value. Next, you need to determine if the three homes have extra amenities, such as a pool, more square footage, or a smaller lot and adjust up or down for these values.
Visit Homes like Yours
Finding true comparable features may require a visit to homes like yours that are currently on the market. This will allow you to look at the overall condition and features, up close and personal, as well as what they are doing or not doing to sell their home, giving you a better determination of your homes price and chance of selling quickly.
Sold Homes vs those actively on the Market
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The value of sold homes is a true indicator of what a home like yours is worth. However, local trends can affect home values very quickly. When searching for currently listed and sold homes, don’t go back too far. Three months is far enough. As you can see here in the median listing graph, the median listing price of homes increased by 26% in thirty days, which happened at the same time last year but the increase was not as great.
Listing your home at comparable prices that are over sixty days old can cause you to leave a lot of money behind if you price your home too low. The time of year that you sell your home can be a big factor in your listing price, as well as what homes sell for, especially in areas where second homes are prevalent.
Now List it for Sale
Whether you sell your home yourself, enlist the services of a real estate agent, or use a site like Movoto to sell your home, its value should be determined beforehand, using real estate comps for a realistic price. Even if you use a real estate agent, it’s a good idea to know the prices of the properties that yours is competing against so that you have a realistic idea of the value of your home.
Prices that are determined by love and sentimentality will not get your home sold as fast as solid real estate comps. Not as thorough as an appraisal, this is the basic method used by appraisers to determine the value of your home.
