This is the fourth and, for now, final post in a series on Pricing Your House to Sell. Let’s continue.
There are other factors to consider that can affect the value of your home, but generally these are less important than location, size, and number of bedrooms and bathrooms. Some of these will be more difficult to calculate unless you use a specialist. When looking through local comps, there are a number of additional things to compare:
Distance – The best comps are located within a quarter-mile radius of your property. If you are in an area with little market activity or in a rural area, using comparable properties from farther away may be necessary. In neighborhoods where comps include a lot of short sales or foreclosures, appraisers should be able to expand the geographic area or extend the time frame for eligible sales, thereby getting a more representative cross-section of home prices.
Date of Sale of Comp – Appraisers prefer recent home sales (ones that have taken place within the last six months). If the market is slow, they may need to go back twelve months.
Construction – Brick, wood, vinyl siding, etc.
Condition – Even when everything else is the same, obviously a house in poor condition will have a lower value than one that has been kept up.
Age – Where possible, use comps that are the same age as your property. Try to stay within three years difference, either older or younger. Keep in mind that a rehabbed property does not hold the same value as a new one.
Square Footage – Square footage is determined by the amount of heated square feet. Unheated basements and garages do not count in square footage. Try to keep your comps within 100 square feet.
Number of floors – Use properties that have the same number as your property.
Basement – If your house is on a crawl space or slab, use comps on crawl spaces or slabs. If you have a basement, pull comps with basements. Try to keep the square footage of the basements as close as possible.
The value of some housing features varies depending upon the region of the country. Basements often come with homes in the North where the freeze line is deep so the foundations, or basements, are also. In warmer climates the freeze line, if there is any, is very shallow so all that is required for the foundation is a crawl space under the house. Some Southern homes are built directly on top of concrete slabs and have no crawl space.
Garage or Carport – Again, use same for same.
Lot Size – Compare similar size lots.
How long the property has been on the market – A long time on the market may indicate that it’s overpriced. A buyer will typically assume (1) you are now an eager seller or (2) you have set an unrealistic sales price and aren’t willing to work with offers.
Why you are selling – A buyer may want to know because, again, if you have been transferred and are moving soon, you are most likely motivated. If you are not willing to move without a high enough offer, you are not seen as motivated. And, if you’re extremely motivated you may be willing to offer owner financing.
You get the idea. The more similarities between properties, the easier it will be for agents and buyers to comp your property. It is often very difficult to find like-kind comparisons. When comps vary significantly from your property, they are not really comps! Numbers need to be adjusted accordingly and this takes experience and training. If it were easy, we wouldn’t need agents or appraisers!
For even more detailed information, be sure to check out my book, The Essential Handbook for Selling a Home.
Any more questions?