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
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
- 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