You can do this yourself! Although it’s easier said than done, finding out what other similar homes in your area have sold for recently should get you in the ballpark. To help you do this, here is a list of some tips to follow if you go about it on your own.
Keep in mind that there are many subtle factors to take into consideration before you have an accurate selling price. Which is why I encourage you to have a Comparative Market Analysis (CMA) done by a Realtor®.
For more information about Selling your home and a FREE, no-obligation CMA, visit the Sellers section of my website.
So what should I compare my home to?
Particularly in subdivisions, most homes are built by the builder from a selection of different models. Your best comparable sale is the same model as your house in the same subdivision. If you can’t find that, here are other factors that count:
Location – The closer to your house the better, so try to choose from within a mile or two of your home. Good comparable sales are other houses in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.
Home style – Focus on comparable sales that are the same home style, construction material, roof type, square footage, number of bedrooms and bathrooms, similar layout (1 or 2 floors), finishes, garage and yard size and community amenities.
Upgrades – Does it have a new kitchen? How about a central A/C or window A/C? Is there crown molding, a deck, or a pool? How big is the pool?
Community – Does your community offer the same amenities (pool, gym, lake, walking trails, etc.) as what you are comparing? Is there a homeowners association and what are the fees?
Sale date – Keep your comparison to homes that have sold recently (2 years max). Even more recently (6 months) in fast moving markets where prices are rising or falling quickly.
Value-add incentives – Was down payment assistance, closing costs contributions, or a free TV/Cable offered to buyers? Make sure you take into account the value of any incentives used to close comparable sales.
Realtor® Agents can do things you may not be able to
Your home will always be different from your neighbor, even when both are the same model. Those differences—such as when your home has one more bedrooms than the comparables or home office— are what your Realtor® Agent will focus on to determine what adds value to the sale price.
Realtor® Agents have been inside many homes in your neighborhood, have access to the tools and are in the best position to find the best comparable sales. They can read the comments a selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers have said about the comparable sale.
The importance of a professional opinion
If you took it upon yourself to self-appraise the value of your home, do get a professional opinion anyway. Remember, as a homeowner it is hard to be objective and all too easy for self-appraisers to become emotionally attached to the unique qualities of a home. After all, you live there and it is your home!
Your Realtor® Agent will be honest with you and offer an un-biased opinion of how your home sale will stack up against the competition in your immediate area. A professional opinion will help you put in perspective the things that affect the sale price and the ones that don’t, regardless of how much you like them. And don’t take any criticism personally as it is a reflection of the things that add or subtract from your property’s value, and not a reflection of you as a person.
Should you compare against foreclosures or short sales?
Foreclosed properties are often in poor condition because due to very same reason why mortgage payments have not been made, maintenance has also been insufficient or flat-out ignored. Most foreclosed properties are sold below market value and are a poor comparable sale.
Short sales are typically in good condition, because often the seller who was occupying the home a the time of sale has maintained the property. However, they are still distressed sales and as such, the sale price may be substantially lower than market value. Don’t forget that Short sales as forced sales due to personal reasons – divorce, relocation to another city or missed payments and a looming foreclosure – resulting in the seller or the lender being willing to lower the price to unload the property.
Your Realtor’s® knowledge and experience with the local market is a great asset to have on your side, working for you as you approach the sale of your home. They truly can be the difference between weeks and months of frustration, time wasted and disappointments or a quick and successful sale.