Does Your Latest Listing Have an Atypical Feature? Some Things to Note

By
Real Estate Agent with Roots & Wings Realty Group / eXp Realty TREC #702048

Every market is different, but here in the Katy, Texas area having the master bedroom on the first floor is more typical - and more preferred by buyers. One of the early lessons I learned in my real estate career is that if a home has an uncommon feature or less desired feature, you need to be sure that you're comparing it to homes with that same atypical feature when running comps.

 

In this article, I'm discussing a master bedroom, but this extends to any feature of a home that's not common for the area - or even those that are, but can make a difference in sales price, such as being sure to comp single-story homes only to other single-story homes vs. comparing them to homes with two stories.

 

Back to the original topic at hand - when comparing homes for sale in Katy, the master being up can make a big difference in both sales price and days on the market. Let's take a look at a real-world example.

 

I performed an MLS search of a popular subdivision here in Katy featuring affordable prices - Memorial Parkway. I searched for all sold listings in the last year that had between 1,800 - 2,400 square feet of living space and no private pool. The below table shows the averages for the 40 homes that fit these criteria.

Square footage Beds Baths List Price Sales Price SP/SF SP/OLP DOM
2,117 4 2 $201,079 $196,286 $93.09 95.76% 39

 

Then I segmented the search out - first adding an additional criterion for the results that the master bedroom was on the first floor. This search returned a total of 16 matches. The averages for these homes is below.

Square footage Beds Baths List Price Sales Price SP/SF SP/OLP DOM
2,155 4 2 $198,819 $194,838 $90.58 97.58% 21

 

Then I segmented the search to only include homes where the master bedroom was on the second floor. This search produced three results (dear real estate agents, please fill out the complete details on your MLS listings).

Square footage Beds Baths List Price Sales Price SP/SF SP/OLP DOM
2,126 3 2 $223,333 $220,000 $103.59 93.67% 88

 

While the price per square foot is higher on the homes with two stories, note that the days on the market is over 300% longer. Additionally, the percentage of sales price vs. the original listing price is 4% lower for homes with the master up vs. homes with the master down.

 

Now let's get a little more granular. The original results included all homes in the neighborhood. These next set of results compare only those homes with two-stories.

 

Two stories with the master down averages for the six results it returned are below.

Square footage Beds Baths List Price Sales Price SP/SF SP/OLP DOM
2,284 4 2 $203,633 $198,900 $87.14 97.14% 24

 

Two stories with the master up averages are below.

Square footage Beds Baths List Price Sales Price SP/SF SP/OLP DOM
2,126 3 2 $223,333 $220,000 $103.59 93.67% 88

 

Once again, while the price per square foot is higher on the homes with a master up, the days on the market for homes with the master up vs. the master down is 260%+ higher and the percentage of sales price vs. the original listing price is 3.7% lower.

 

Getting more granular with comps can help properly set client expectations. If a homeowner with a master bedroom up needs to sell their home fast, you might want to explain that they may want to price the home more aggressively to combat the much longer DOM averages for homes with a similar makeup. If your client is an investor who flips houses, they'll want to calculate holding costs accordingly. If the buyer has time, showing them these kinds of figures can help them feel more at ease when their home isn't selling as fast as some of those around them with different makeups.

 

Rae Dolan
Katy Real Estate Agent
Roots & Wings Realty Group
Champions Real Estate Group

Posted by

Cheers,

Rae Hoffman

 

Katy Texas Real Estate Agent
#RootsandWingsRG
Roots & Wings Realty Group
powered by eXp Realty

 

// SRS, NHCS, e-Pro, RENE, PSA

Comments (3)

Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

So true, another issue a  3 bedroom 2 bath home versus a 3 bedroom 2.1 bath home. It's amazing how much perceived ( and real ) value that powder room adds to a home. Who wants to have to clean the kids bathroom when guests are over? We had a client build a gorgeous home last year and he only wanted 2 baths. He's been relocated and we are currently marketing it. Buyers who have looked at the house - love it, "if only it had a powder room."  We have adjusted the price and hope to get a buyer soon. D

Jul 08, 2018 07:21 AM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Rae, You are showing your value with this excellent analysis. I'm trying to think of a similar differential in my marketplace, it wouldn't be master bedroom up or down. Thank you for the idea!

Aug 06, 2018 01:00 PM
Rae Hoffman
Roots & Wings Realty Group / eXp Realty - Katy, TX
Real estate agent serving the Katy area

No problem Wendy! Yeah, there's abnormalities in every market, though they likely differ as to what they are by geographical area. :)

Aug 14, 2018 07:34 AM