After speaking with your Realtor about your decision to put your home on the market, you may have heard him or her mention pulling some comps in your neighborhood. It’s possible you heard the same terminology used when you initially purchased your home. Analyzing comparable sales, or “comps” as they’re commonly referred to in the real estate world, are important factors in both buying and selling. But how you used comps when determining the offer price on your home is a lot different than how you will use them to determine your asking price. Luckily the agents at Network Real Estate can help you make sense of comparable sales – from what they are exactly to how to use them and beyond.
What are Comparable Sales?
Comparable sales are recently sold properties in your neighborhood, or in a neighborhood close by, that are similar to your home in terms of size, age of home and other factors. As mentioned above, comparable sales help buyers determine offer prices and sellers determine asking prices. Furthermore, they help appraisers determine home value. Your Network Real Estate agent can provide you with a list of comparable sales, but it’s beneficial for you to learn more about how these comps should be chosen and used when selling your home.
Choosing the Right Comparable Sales
When it comes to looking at recently sold properties near your home, think apples to apples. You’ll want to compare homes with the same number of bedrooms and bathrooms as yours, with a similar size in square feet. Even lot size should be similar, ideally.
Additionally, some homes in your neighborhood may have been developed at different times. Perhaps one half of your neighborhood (the half you live in) was constructed in the 1990s, and the other half in the 2000s. Since these are two different decades, and home styles and preferences changed a lot in between, you’d need to only compare your home to the properties recently sold in the ‘90s half of the neighborhood.
You’ll also want to choose homes in conditions similar to yours. If your home boasts great curb appeal and well-maintained landscaping, don’t compare it to a run-down home in need of a pressure wash and that’s desperately seeking sod.
Also remember not to look too far back when it comes to pulling comparable sales. The housing marketing shifts frequently, and if you’re looking at sales from last year, that’s not helpful. Try to stay within the last six months, or better yet, the last three months if possible.
Using Comparable Sales
So you’ve found a handful of homes closest to yours in terms of size, age and general condition. Before determining the best price to ask for your home, consider amenities your home may have that the comps don’t, and vice versa. For example, if your home has an upgraded kitchen with granite countertops, stainless steel appliances and new cabinetry, that’s more money you can ask for [assuming the comparable sales don’t also have an upgraded kitchen]. And if the comp you’ve pulled has a pool on their property, you probably wouldn’t ask as much for your home.
Once you’ve nailed down what you consider to be a fair asking price with your Realtor, it’s time to put your house on the market. And with any luck, you’ll be scheduling showing times multiple times a week. Just remember it’s common to receive many low-ball offers on your property, as this is a common strategy for potential buyers. Don’t get too discouraged, and remember that Network Real Estate’s agents are here to help you sort through the offers – both the good and the bad – to settle on a final price that fits your needs.
Kevin McKoy is a GRI-certified, licensed real estate broker at Network Real Estate, which has exclusively served a high volume of property sales and purchases in the greater Wilmington area for over 30 years. With three offices at College Road, Historic Downtown and Pleasure Island, Network’s brokers are widespread and well-versed in this marketplace, making Network a preferred Real Estate company for first-home buyers and beyond.
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