Know Your Comps to Get the Best Price

Setting the right price for your house at the start is always important, especially during a buyer's market. But how do you know what the right price is – the price that will make your house sell quickly and for a price you're happy with?

For starters, you'll need the comps. Comparable sales of houses in the same area in recent months are one of several factors that your Realtor® will consider as you work together to set your asking price. Note I said "sales" not "houses for sale." The price of other houses for sale only tells you what other owners hope to sell for. Sales tell you where the prices ended up, what real buyers actually paid.

Comps give you a starting point. Once you know what a house sold for you can look at the details of that house and compare them to yours. You make adjustments up and down to come to an approximate equivalent price. For instance, if another house has more square footage that might sell for more than yours, but a new kitchen or deck in your house will give it a higher market value. Again, this is where your Realtor's® experience will be invaluable in setting a price that reflects your home's condition and location.

Where do the comps come from? There are a variety of sources including the multiple listing service and public records of sales, selected by professionals who know the neighborhood and the specific market. One place they do not come from is an internet "estimating" site that is not based on solid, proven information. Such sites have sprung up recently promising to estimate the value of your home and every other house around. So far, they don't have a good record for accuracy or completeness. What they provide is nowhere near a true comp. Their computer data banks cannot make the judgments that only a human – in this case a Realtor® - can make to recognize the differences in details that lead to differences in pricing.

Comps can be valuable to sellers in setting the price, and also to buyers in understanding the price range in a particular area. But whether buyer or seller, always work with your Realtor® to get the best value.

Comments are welcome.

Thank you.

Michael Trust, Realtor® and Broker
www.MichaelTrustRealty.com