If you live in an area that has planned communities and tracts, it's easy to study the comparable sales for your area to assess value and pricing. In Orange County, it's the first place I go when trying to determine a price for a listing. But don't fall into the trap of thinking the homes in your tract are your competition - it may be the tip of the iceberg.
I see it all the time. I hear the same comment from struggling sellers:
- We're priced $x less than our model down the street. We are the best deal in here.
- If you look at all the homes on this side of the freeway between 'blank' and 'blank', we are the lowest price.
- We're the nicest one in the neighborhood.
All of this may be true, but it fails to take into consideration one valuable piece of information. Buyers rarely look in one specific tract. They rarely give themselves the same guidelines for assessing value (between 'blank' and 'blank') that a seller does. Buyers are often looking in several tracts within a city and they may be looking at more than one city.
So when you are trying to price your home, you want to look at the following:
- Your individual tract.
- The available properties in your city. This is a truer representation of your overall competition.
- The sold homes in your city. What was the list price and what were the sale prices? How many days were they on the market?
- Surrounding areas and the active inventory that might be competition for your home. Often an agent will know what other cities would be competing for buyer attention.
Pay close attention to what is selling. The homes that have sold indicated the price that a buyer is willing to pay. Homes that are currently on the market are not going to give you any real indication of value.
Remember, buyers are looking for a reason not to buy.When they go look at 8 homes in a day, your home has to stand above all the others. It can't be forgettable in comparison. When in doubt, ask your agent to show you the local competition.