How To Price Unique Properties (Update)

"In setting a price on your home, be sure to compare apples to apples and not to oranges."
-Carol Williams

This post was originally published on April 21, 2007.  Since I retired from active listing and selling and property management in 2011, I decided I need to remove old contact links and remove links to old websites and blogs.

Also, please keep in mind that I am no longer licensed and cannot be your real estate advocate.  However, if you are looking to buy or sell a home or investment property in Wenatchee and don't know who to call, let me know.  I can make some recommendations of highly qualified agents for you to interview and hire based on your specific needs. They can give you the most current info, news and trends in the local real estate market.  I get no financial compensation for these recommendations. I just want you to have a great buying or selling experience.

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One of the most common tasks for a real estate agent is to prepare a Comparable Market Analysis (CMA) for homeowners that are considering selling their home. I prefer to call it a "Price Analysis".  An official appraisal would cost around $450 but most of us agents provide this service for FREE as a way to endear ourselves to potential sellers.  We hope, of course, we will be hired to sell the home when the time comes.   

One of our greatest challenges in preparing a price analysis is to put a value on a home that is unique, meaning it is difficult to find true comparables.   The Wenatchee area is a market with lots of unique properties.  Up until recently there just weren't a lot of housing developments, where homes of similar style, age, and size were built within close proximity to each other at the same time. 

With unique properties, it is necessary to find the "most comparable" properties then use adjustments and compensating factors to establish a price.    When doing a CMA we try to find homes of similar actual age, square footage, lot size, and location.  We use recently "sold" and currently "listed" properties in our analysis.   When we can't find homes of similar actual age, we try to find homes with a similar "effective age"... or use a depreciation factor to offset the age difference.  An example of the  "effective age"  factor would be a home that is actually 20 years old but has been highly updated and upgraded, giving it an "effective age" of, say, 5-8 years.  This is somewhat of an arbitrary opinion... but, nevertheless, a way REALTORS® and professional appraisers value properties.   So, once you have the "effective age",  you can compare the home to homes of similar "effective age" and not actual age.   Also, if you must compare the home to newer homes, a depreciation factor can be used.

There are other considerations, of course, but this gives you an idea of some of the variables we use to determine value on a unique property.   Ultimately,  it comes down to what price a buyer is willing to pay for the home.    Most sellers, regardless of their list price, are willing negotiate at least some on price... or give some other concessions such as paying part of the buyers closing costs.   





TopTeamCarol@gmail.com

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Information is FREE.  Knowledge, Experience & Integrity Are Priceless