A Tale of Two Comps: COMParables and COMPetition

Taking a few liberties with Charles Dickens here....

It was the best of markets, it was the worst of markets, it was the market of wisdom, it was the market of foolishness, it was the market of belief, it was the market of incredulity, it was the market of Light, it was the market of Darkness, it was the market of hope, it was the market of despair, we had everything before us, we had nothing before us, we were all going direct to closing, we were all going direct to foreclosure - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparables only.    (Sorry, Charlie.)  It's all about your perspective.

 I help buyers and sellers in Wake County, NC. 

Sellers too often limit their view to the "comparable sold properties."  Sellers say, "I have 5 comps."  "I can justify my price with the comps."  "The comps support me."  "Why should I sell for less than the comps say?" 

It is just great that we can justify the price on your home, based on the most recent sales in your neighborhood, or even when we drag in a couple of homes from the subdivision across the street, or down the road.  Great.  You are "Priced Right."  So, how is that sale going?  Have you been on the market longer than you thought you would be?  Did your lookie-lous buy somewhere else?

Now let's talk about another set of comps.  As in "Market Competition." 

If you are in Wake County, you have tons of Competition.  Tons.  So, yes, we have a lot of Buyers.  And they have a lot of homes from which to select.

It is not uncommon for a Buyer, particularly a relocation client from out of town, to look at properties in a very wide area, up to 20 miles wide, or even wider.  See, they are focused on value as well as specific location.  And, with Wake County Public School System running the whole county, they can go twenty miles away and be in the same school district.  I routinely show Buyers homes in Raleigh, Cary, Apex, Holly Springs, and Morrisville.

 

And transportation options to centers of employment are diverse enough, Buyers can select from multiple areas and have agreeable commutes.

So, what ties the Buyers to your home?  What will compel them to buy YOUR home, from amongst the competition? 

Comparables?  Not really.  A motivated Seller will consider the main function of the Comparable Sold Properties as supporting the sales value for Buyer lending purposes.

Town boundaries?  The Cachet of Cary?  The Appeal of Apex?  Raleigh Suburbia?  Hardly.  They are all great choices, but our annexation laws in Wake County allow for immense gerrymandering of town boundaries.  Some areas of Cary are not even contiguous to Cary.  Some Caryites have mailing addresses from surrounding towns, as the Postal Service serves the customer as they deem efficient, not as the towns have gained jurisdiction.  Cary homes may have an Apex mailing address, and a Garner telephone exchange.

Will the schools keep them in your neighborhood?  Nope.  Buyers may well attend the same or similar schools from a home miles away.

It was the best of values.  It was the worst of values.  It was the same house....

You may have the best property on your street or in your neighborhood.  You need to know how your home stacks up in the broader market, to the competition.  Is there better competitive inventory 5 miles away that is not considered "comparable?"

All the choices your prospective buyer has are competing with you.

If you are priced at $350,000 in a luxury townhome, you have to recognize that YOU are locked into selling a townhome.  Your Buyer may choose to buy a townhome, but has choices of townhomes, single family homes, condominiums, multi-family, in town or rural, etc.  You must make Buyers want YOUR offering above the others.

You have to make your home among the most appealing in the broader competitive market.  Price.  Condition.  Updates.  Decor. All of them must combine to help sell your home.  If you think that any Buyer "...Will have to overlook" something, bear in mind that you will probably take a price hit for that approach.  If they look at all.

It was the market of comparables, it was the market of competition...

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Mike Jaquish, REALTOR® 

919-880-2769  www.MikeJaquish.com 

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Broker Associate, KELLER WILLIAMS® Realty, Cary, NC