Before you put your property on the market for sale you should research comparable properties to make sure your list price is perfect. Using the right comparable sales will be critical in finding out how much your property should sell for.
Here are a few resources:
1. Use Realtor.com and search for “Recent Sold” properties in your town.
2. Check out Zillow.com and search “Recent Home Sales” in your area.
3. Try Trulia.com and search for “Sold” properties.
Don’t forget to search the websites mentioned above for active properties similar to yours. Doing this will help you put into perspective realistically what your “asking price” should be. It will also help you to gauge where your property sits on the price list compared with your competition.
How much can you sell for? Probably about as much as your neighbors got, as long as the neighbors sold their property recently and it was similar to your property. Knowing how much properties similar to yours (called comparables or comps), have sold for gives you the best idea of the current estimated value of your home. The difficult part is finding sales that closely match your property.
What makes a good comparable sale? Your best comparable sale is the same style property as yours, in the same neighborhood, and having sold in the past 6 months. If you cannot find exact property matches, here are other factors to consider when picking your comparables:
Location: The closer to your house the better, but don’t just use any comparable sale within a 1-2 mile radius. The best comparable sale is a property in your neighborhood, your subdivision, on the same type of street as your property, and in your school district.
Home Style: Try to find comparable sales that are like your property in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it is finished), finishes, and yard size.
Amenities & Upgrades: Is the kitchen new? Does the comparable sale property have central air conditioning? Is there a deck or a pool? If a condo, does your community have the same amenities (pool, workout room, clubhouse, walking trails, etc.) and similar homeowners association fees?
Date Of Sale: You may want to use a comparable sale from back when the market was better, but that will not work. Many buyers use FHA government guaranteed loans, and those lending programs say comparable sales can be no older than 90 days.
Sales Sweeteners: Did the sellers give the buyers down payment assistance, closing costs, or a free extras? You have to reduce the value of any comparable sale to account for any deal sweeteners.
Put your comparable sales properties into two columns: 1. More expensive and 2. 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), you’ll need to carefully consider whether to use these comparable sales.
A foreclosed home is sometimes in poor condition because owners who can’t pay their mortgage usually can’t pay for upkeep either. Your home may be in great shape, so the foreclosure should be priced much lower than your home or not used at all.
Short sales are typically in reasonable condition, although they are still considered distressed sales. The owner usually has to sell because they’ve lost their job and are underwater, and their home is not worth what they owe on their mortgage. How much short sales are discounted from their market value varies among local markets.