How to Use Comparable Sales to Price Your Home

How to Use Comparable Sales to Price Your Home

Before you put your home up for sale, understand how the right comparable sales help you and your agent find the perfect price.

Before you put your home up for sale, understand how the right comparable sales help you and your agent find the perfect price.

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:

Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades: Is the kitchen new? Does the comparable sale house have full A/C? Is there crown molding, a deck, or a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowners association fees?

Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sales sweeteners: Did the comparable-sale sellers give the buyers downpayment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents can help adjust price based on insider insights

Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or a basement office—is one of the ways real estate agents add value.

An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to her without taking the criticism personally).

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 real estate agent’s knowledge of the local market to use a short sale as a comparable sale.

More from HouseLogic

What You Must Know About Home Appraisals

6 Reasons to Reduce Your Home Price

By: Carl Vogel© Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®

 

Home Prices Up 25% Over Three Years

Home Prices Up 25% Over Three Years

Published: February 11, 2015

Prices increased steadily due to a shrinking supply of homes for sale and a growing number of homebuyers entering the market to take advantage of low mortgage interest rates, said NAR Chief Economist Lawrence Yun.

“Home prices in metro areas throughout the country continue to show solid price growth, up 25% over the past three years on average,” he said. “This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”

The five most expensive housing markets in the fourth quarter:
1.  San Jose, Calif., $855,000
2.  San Francisco, $742,900
3.  Honolulu, $701,300
4.  Anaheim-Santa Ana, Calif., $688,500
5.  San Diego, $493,100

The five lowest-cost metro areas in the fourth quarter:
1.  Youngstown-Warren-Boardman, Ohio, $78,000
2.  Rockford, Ill., $86,800
3.  Toledo, Ohio, $87,100
4.  Decatur, Ill., $90,400
5.  Cumberland, Md., $90,500

The national median existing single-family home price in the fourth quarter was $208,700, up 6.0% from the fourth quarter of 2013 ($196,900).

At the end of the fourth quarter, there were 1.85 million existing homes available for sale. That’s a 4.9-month supply given the pace at which homes are selling. A supply of six to seven months represents a healthy balance between buyers and sellers.

“Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas — particularly in the West — where the current supply of new and existing homes for sale is failing to keep pace with overall demand and growing populations,” said Yun. “Unless homebuilders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring.”

Condo and Co-op Prices

Nationally, condominium and cooperative prices (NAR measures those in 61 metro areas) reached $203,300 in the fourth quarter, up 3.3% from the fourth quarter of 2013 ($196,900).

Forty-six metro areas (75%) showed increases in their median condo price from a year ago; 14 areas had declines.

NAR President Chris Polychron said REALTORS® throughout the country are reporting slightly improved buyer demand compared with a year ago. “Interest rates below 4%, rising rents, and healthier local job markets are convincing more consumers to consider homeownership,” he said.

To measure affordability, NAR compares the median income ($65,782 nationally) and median home price ($208,700).

How Much Income Do You Need to Buy the Median Single-Family Home?

Downpayment Income Needed to Buy $208,700 Home
5% $45,863
10% $43,449
20% $38,621

Existing Home Price by Region

Q4 Median Price Price Change vs. 2013
Northeast $246,300 Up 2.2%
Midwest $162,000 Up 6.2%
South $183,500 Up 6.2%
West $299,500 Up 4.8%

 

 

By: Dona DeZube© Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®

7 Tips for Staging Your Home

7 Tips for Staging Your Home

1.  Start with a Clean Slate

Before you can worry about where to place furniture and which wall hanging should go where, each room in your home must be spotless. Do a thorough cleaning right down to the nitpicky details like wiping down light switch covers. Deep clean and deodorize carpets and window coverings.

2.  Stow Away Your Clutter

It’s harder for buyers to picture themselves in your home when they’re looking at your family photos, collectibles, and knickknacks. Pack up all your personal decorations. However, don’t make spaces like mantles and coffee and end tables barren. Leave three items of varying heights on each surface, suggests Barb Schwarz of Staged Homes in Concord, Pa. For example, place a lamp, a small plant, and a book on an end table.

3.  Scale Back on Your Furniture

When a room is packed with furniture, it looks smaller, which will make buyers think your home is less valuable than it is. Make sure buyers appreciate the size of each room by removing one or two pieces of furniture. If you have an eat-in dining area, using a small table and chair set makes the area seem bigger.

4.  Rethink Your Furniture Placement

Highlight the flow of your rooms by arranging the furniture to guide buyers from one room to another. In each room, create a focal point on the farthest wall from the doorway and arrange the other pieces of furniture in a triangle around the focal point, advises Schwarz. In the bedroom, the bed should be the focal point. In the living room, it may be the fireplace, and your couch and sofa can form the triangle in front of it.

5.  Add Color to Brighten Your Rooms

Brush on a fresh coat of warm, neutral-color paint in each room. Ask your real estate agent for help choosing the right shade. Then accessorize. Adding a vibrant afghan, throw, or accent pillows for the couch will jazz up a muted living room, as will a healthy plant or a bright vase on your mantle. High-wattage bulbs in your light fixtures will also brighten up rooms and basements.

6.  Set the Scene

Lay logs in the fireplace, and set your dining room table with dishes and a centerpiece of fresh fruit or flowers. Create other vignettes throughout the home — such as a chess game in progress — to help buyers envision living there. Replace heavy curtains with sheer ones that let in more light.

Make your bathrooms feel luxurious by adding a new shower curtain, towels, and fancy guest soaps (after you put all your personal toiletry items are out of sight). Judiciously add subtle potpourri, scented candles, or boil water with a bit of vanilla mixed in. If you have pets, clean bedding frequently and spray an odor remover before each showing.

7.  Make the Entrance Grand

Mow your lawn and trim your hedges, and turn on the sprinklers for 30 minutes before showings to make your lawn sparkle. If flowers or plants don’t surround your home’s entrance, add a pot of bright flowers. Top it all off by buying a new doormat and adding a seasonal wreath to your front door.

Related:

  • Spring Cleaning Guide
  • 11 Ways to Create a Welcoming Front Entrance for Under $100
  • Fragrant Plants that Will Keep Your Home Smelling Good

G.M. Filisko is an attorney and award-winning writer who occasionally rearranges her furniture to find the best placement—and keep her dog on his toes. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

 

By: G. M. Filisko © Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®

Keep Your Home Sale from Falling Apart

Keep Your Home Sale from Falling Apart

After finding a buyer, all you have to do to make it to closing is to avoid these five traps.

Finding a buyer for your home is just the first step on the homeselling path. Tread carefully in the weeks ahead because if you make one of these common seller mistakes, your deal may not close.

Mistake #1: Ignore Contingencies

If your contract requires you to do something before the sale, do it. If the buyers make the sale contingent on certain repairs, don’t do cheap patch-jobs and expect the buyers not to notice the fixes weren’t done properly.

Mistake #2: Don’t Bother to Fix Things That Break

The last thing any seller needs is for the buyers to notice on the pre-closing walk-through that the home isn’t in the same condition as when they made their offer. When things fall apart in a home about to be purchased, sellers must make the repairs. If the furnace fails, get a professional to fix it, and inform the buyers that the work was done. When you fail to maintain the home, the buyers may lose confidence in your integrity and the condition of the home and back out of the sale.

Related: 10 Common Repair Costs

Mistake #3: Get Lax About Deadlines

Treat deadlines as sacrosanct. If you have three days to accept or reject the home inspection, make your decision within three days. If you’re selling, move out a few days early, so you can turn over the keys at closing.

Mistake #4: Refuse to Negotiate Any Further

Once you’ve negotiated a price, it’s natural to calculate how much you’ll walk away with from the closing table. However, problems uncovered during inspections will have to be fixed. The appraisal may come in at a price below what the buyers offered to pay. Be prepared to negotiate with the buyers over these bottom-line-influencing issues.

Related: How to Field a Lowball Purchase Offer

Mistake #5: Hide Liens from Buyers

Did you neglect to mention that Uncle Sam has placed a tax lien on your home or you owe six months of homeowners association fees? The title search is going to turn up any liens filed on your house. To sell your house, you have to pay off the lien (or get the borrower to agree to pay it off). If you can do that with the sales proceeds, great. If not, the sale isn’t going to close.

Related:

  • How Much Value Does Regular Maintenance Add to Your Home?
  • 7 Steps to a Stress-Free Home Closing

G.M. Filisko is an attorney and award-winning writer who wanted a successful closing on a Wisconsin property so bad that she probably made her agent rethink going into real estate. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

By: G. M. Filisko© Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®

 

Choice One Key Title and Escrow is presented award

Choice One Key Title and Escrow is presented award

Representing Key Title and Escrow, Kim Chavez, president of the firm was presented with the Foundation of Excellence Award. This award is awarded to top title agents in the industry for Outstanding Performance in Claims Prevention. In addition to the Excellence Award Key Title and Escrow was also presented with the Heritage Award for over 10 years of outstanding professional service. These awards were presented by industry leading title underwriter Stewart Title.

Choice One Key Title and Escrow is located at 18400 SW 97 Ave. Cutler Bay, FL. 33157. Providing real estate title and escrow closing service fast, accurate and statewide. You may contact Key Title and Escrow at 305-235-4571 or email kim@titleescrow.us

 

What do I mean when I say MLS?

What do I mean when I say MLS?

Odds are you’ve spent a little time online searching for homes. After all, most home searches begin online. You may have even used a broker’s website or a site like Trulia or Zillow to help you browse listings.

But where does listing information come from?

Way back in the day, prior to the Information Age revolution, brokers used to gather and exchange information about their properties. The idea was fairly straightforward: I’ll help you sell your properties if you help me sell mine. It’s a “private offer of cooperation and compensation.” Cooperation meant the real estate industry could thrive and buyers and sellers could enjoy smoother transactions.

This spirit of cooperation gave rise to Multiple Listing Service(s) (MLS). By consolidating information about housing inventory in an MLS, listing brokers and buyers’ brokers can easily share up-to-date information about homes on the market. Though an MLS is typically a private database available to brokers, much of the information is syndicated to outside sites in the interest of casting wider net for buyers and sellers.

As an MLS is the primary source of information about a property, it tends to be the most accurate. It may also contain private information for use by brokers only, such as times the home is available for showings and seller contact information.

There are upwards of 850 MLS databases in the U.S. alone, and to a certain extent, there is market pressure to centralize these into a national MLS database. We’re sure to see changes in how Multiple Listing Services are used in the future, but the core benefits to home sellers and buyers is sure to remain.

Ready to put the power of an MLS to work for you? Search with me today for homes on the market right now. I’d be happy to help you find your next home:

Marcos Fullana 786-385-8342 or email: mk@choiceone.us.Marcos Fullana 786-385-8342

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