Comparable vs. Competition

Transcript:

Today I wanted to touch base on competition vs. comparable. A comparable sale is where a bank appraiser would compare your house to other similar homes; this is what most Realtors do too. They come by your home and show you other similar homes; let’s say you have a cape cod with three bedrooms and two bathrooms. They will show you other cape cods that are similar that they have sold and that are for sale now.

But I think in this market you have to look a little further and that is, what the competition is. Buyers aren't limited to buying cape cods in your town. They could look other at styles. They may not care if it's a cape cod. If you can buy a split level in the same price range or slightly higher or perhaps a different town, they will. Let’s say your house is in New Milford and they also might be looking in Oradell or River Edge where they couldn't afford that house a couple of years ago but now that the market has dropped maybe some of the homes in those towns have slipped down into their price range. Also I had a buyer the other day tell me they are considering renting and that's an option for buyers or also maybe a town house or different county.

So I guess what I want to point out is that there is a big difference in a comparable sale and a competition, and when your pricing houses, putting it for sale or your “saled” out and haven't been able to sell, you should really be looking at the competition not just the comparable. If you have any questions you can email me at Dave@DaveMillerRealEstate.com.