There’s no doubt that a buyer’s market can be challenging for sellers. Yet it does not mean that sellers cannot enter the market, or that they can’t expect a fair price for their home. Home sales in a buyer’s market may take longer, but a little creativity can go a long way towards helping sell your home without having to significantly drop the price. I can offer you the following suggestions, based upon my many years of experience for sellers who want to speed up the process.
What’s My Home Worth?
Comparables, or in our industry often referred to as simply “comps”, play the biggest role in setting a price for a home. The most popular site online to find and compare very basic information on comps is by using Zillow. For most addresses, Zillow can provide a list of comparable transactions based on available data.
But please note that this data is just the beginning, just scratching the surface of the true valuation of your current or new home. Once we have a list of recently sold homes that have something in common with the one you’re comparing to, my knowledge of homes and sales activity in the area is the best tool you have, whether you are buying or selling a home.
Regarding valuation, there are 4 primary components that I use for picking the best comps for your home of interest. They are:
Location, Location, Location
You’ve certainly heard this one before! And though comps should be as close to the target address as possible, there are some exceptions to this rule. For example, a comp within a block or two of yours might not be applicable because it sits higher on a hill, has a phenomenal view, or is across from a park, or on the other end of spectrum may be closer to a busy street or noisy freeway. Likewise, a similar house could be a mile away, but still be part of the same market area, since neighborhoods are not always carved out in straight, neat boundaries. This might be a good comp, even though it’s further away.
And home in developments should usually be compared with comps from the same specific development, since these homes were built at roughly the same time, and by the same builder and/or developer.
Select Recent Comps
The most recently sold homes will have the strongest bearing on the value of the home you are considering, but in slower markets you might not have this luxury. Getting comps from the previous 3 – 5 months is best, but if not, then go back 6 – 8 months. Similar to location, there are exceptions, and in some cases transactions that occurred up to two years ago are still considered comparable.
Price Per Square Foot
Price per square foot is a time-honored way of valuing real estate. However, it doesn’t account for a choice location, a move-in-ready home, or many other personal criteria. You should also factor things like whether the square footage includes other detached buildings on the property, or the garage. Lot size can also have a significant effect. While a few hundred square feet difference may not impact market value, a private wooded 3-acre lot will fetch much more than a similar house on a half-acre. In such cases dollars per-square foot figures can be very unrealistic or misleading.
There are many additional characteristics that have nothing to do with the data or numbers you have gathered to this point. These things are more difficult to quantify, but could certainly boost or detract from a home’s value. In order to be comparing apples to apples, you need to consider these “soft” features when putting together a comp list. You should also consider things such as:
The house sits on the “nice” side of the street; it’s neatly landscaped or has a unique feature that differentiates it, it has sidewalks, large (and healthy!) shade trees, etc.
Visually make notes of the condition and age of the roof, the chimney and its flashing, the paint, brick or siding condition, the condition of the driveway, fences, etc.
Walking distance to public transport, grocery stores and shops, cafes and restaurants.
Is the house in question well-kept, but others nearly falling apart or in disrepair?
Is the home in a highly-rated school district? Whether you current have school age children or not, owning a property in a good district can add tremendous value to the home.
Is it located on a busy or congested street, or near a noisy freeway or other source of loud noise like an airport, etc.?
The assessment we will do together regarding these 4 components will go a long way in determining the fair market value of a home.
For your own free, personal assessment, please fill out the form below for my own expertise on the home you are considering: