How to comp a property - Dangers of Over Pricing

By
Real Estate Broker/Owner with Russell Realty Group

 

How to comp a property - Dangers of Over Pricing

 

  • Location - based on address and less than 2 miles from subject
  • Gross Living Area - a true comp is above or below the subjects GLA by a couple of hundred square feet, depending on the home being comped. 

 For example, 31 Justin Court has 1580 GLA, so we want something between 1380 - and 1780 in GLA to get an accurate read

  • Bed Count, Room Count and Bath Count - adjustments made with a + or - in value based on the deficiency
  • Home style, shouldn't use a ranch when a colonial is available
  • Year Built
  • Lot Size - doesn't affect value unless it is buildable or sub-dividable, but a few 10ths of an acre really don't help the value one way or the other
  • A usable comp shouldn't be more than 90-120 days old
  • Extras such as Garage don't add significant value
  • Sold comps reflect value vs. active comps, doesn't matter what your neighbors listed for; it matters what your neighbor sold for and when
  • If the comp being used is bank owned or a short sale, adjustments should be made in favor of the subject

Pricing Myths:

My upgrades are better than theirs!  or  I have a completely redone bathtub with a Jacuzzi!

  • This could be the case, but it is a matter of whether a buyer wants your upgrades or wants the cheaper home.
  • Buyers determine what "upgrades" are worth; remember, a home is only worth what someone is willing to pay for it, and what the appraiser thinks it's worth
  • A basement, finished or not, is not considered living area unless it is an above ground split level home
  • Real Money vs Mortgage Money,  would I rather leverage and borrow a higher amount for a better home, or buy a cheaper home and run up my home depot credit card?
  • Fact is, in the end, the buyer determines the selling price


Only 4 things sell a home

  1. Price
  2. Condition
  3. Location.........
  4. and my marketing!

 

If no one comes through the home, it won't be the fault of the marketing,

it will be price, plain and simple

 

 

 

Posted by

 

___________________________________________________________________________________________________

Evan is a career sales manager, personal coach and trainer who holds Real Estate broker licenses in Massachusetts, New Hampshire, New Jersey and Maine. He has made his mark by leveraging and teaching technology to his agents. Evan is dedicated to sharing his lead management techniques with agents throughout New England. The Boston MLS - Join The Russell Team

If we don’t constantly outperform other Agents in today’s marketplace, and use our knowledge and follow up techniques to entice and educate our buyers and Sellers, they will buy or Sell from someone who does.  The Russell Realty Group constantly outperform others and go above and beyond for our clients. By leveraging technology, we bring our buyers the best possible value during their purchase and obtain the highest value for our sellers.

 

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Rainmaker
701,943
Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

Great post it really does pay to price the home right; especially, in today's market the home does need to be priced to compete with all the short sales and REO's.

Feb 08, 2011 04:23 AM #1
Rainer
143,951
Indera Coggins
Re/Max 100 - Dunkirk, MD

Evan, you made really good points above. Good pricing and the condition of a property can make a difference. Great photos would do the job half way but not the falsify photos.

Have a great day!

Feb 08, 2011 04:25 AM #2
Rainmaker
97,859
Evan Russell
Russell Realty Group - Boston, MA

Thank you Pat,

Indera, i left off the picture part, great point!  Have a great day!

Feb 08, 2011 04:30 AM #3
Rainer
18,788
Wade Mattingly
WEICHERT Realtors--Bluegrass Living - Lexington, KY

Evan, how does your marketing set you apart?

Feb 08, 2011 06:16 AM #4
Rainmaker
233,454
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

Hey Evan--I missed this post the first time, but there are some great points in it. I am a real estate attroney with offices in Waltham, Braintree and Boston. I would love to work with you and your clients.

Service is important to me, too.

Elliott Topkins

Mar 12, 2011 09:38 AM #5
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Rainmaker
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Evan Russell

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