How to Use Comparable Sales to Price Your Home

How to Use Comparable Sales to Price Your Home

Do you know how much your home is worth? It will probably be about the same price as other homes in your neighborhood that have sold recently and are similar to your home.

These homes and their values are known as "comps", or comparable sales. Knowing the value of comps in your area will give you the best idea of the current estimated value of your home. The challenge though is to find sales

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?

The ideal comparable sale is a home that is almost the same as your house int he same subdivision. But that kind of scenario isn't as common. Here are other factors to consider:

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:

How many upgrades does the comp have? Does it have the same amenities as your home, such as AC, a deck, or a pool? Does the community it's in have similar amenities?

Date of sale:

Home values fluctuate, so you can't use a value from a year ago. In fact, most lenders say that comparable sales can be no older than 90 days.

Agents can help adjust price based on insider knowledge

Of course, it's very difficult to find an exact clone of your home and neighborhood in most cases. That's where the expert advice of your agent comes in. An experienced real estate agent will examine the differences between your home and comps to adjust the value to match your specific home.

Your agent has certainly been in a lot of homes in your neighborhood, so they know all sorts of details about the comps in the area. They read the comments from other agents in the MLS (multiple listing service) and have 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.

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?

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.

Check back on our blog every week for more real estate advice and local articles about living in Albuquerque. And make sure to follow us on Facebook for up to date real estate news for Albuquerque and surrounding areas.

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