Finding the perfect price for your house is not easy. However, you can use comparable sales in your neighborhood to get a rough idea about the value of your home. Generally speaking, two homes that are on similar streets in the same neighborhood are comparable.
Don’t forget that the value of a property tends to appreciate over time. It may also depreciate if market conditions are not favorable. So if your neighbor sold their house five years ago, you can’t use the sale value of that house to calculate the current value of your home. Here, the key is finding home sales that match yours.
What are good comparable sales?
The best comparable sale is perhaps the house that has more or less the same design as yours and lie in the exact same subdivision. If it was sold last week or last month, you can use the sale value of that house to calculate the estimated value of your house.
Any sales within the same neighborhood, the same sub division, the same school district, and on a similar street as yours can be considered as good comparable sales.
The type and the general condition of your home is another thing you need to consider. If your neighbor sold their home last week and it looks more or less yours in style, size, construction material, number of bedrooms/ baths and yard size, it is a very good comparable sale.
Amenities and upgrades
Amenities are equally important. If your neighbor’s home had full A/C, but your house has air conditioning in just a couple of rooms, perhaps you should quote a slightly lower price when listing your home. Other amenities that can add value to your home are decks and pools. You should also find out whether your community provides the same amenities (swimming pool, garden, gym, walking trails, etc.) as theirs.
Date of sale
According to the government-guaranteed lending programs, comparable sales cannot be older than ninety days. That means you can’t use a sale from 2010 or 2011 when the property market was very high.
You need to find out whether the comparable seller offered any deal sweeteners to the buyer. Some sellers agree to give buyers closing costs. In this case, you will need to quote a lower price. Real estate agents will be able to better adjust prices.
Even if you and your neighbor live on the same street, your house will still be different from theirs in many aspects. For example, you may have an extra bedroom or a fully furnished outdoor living room. These features will make your house more valuable. Talk to your agent to find out how these amenities add value to your home.
If you still have trouble finding the value of your house you should ask your agent to compare your house to other houses on the market. Now you have to put all comparable sales into 2 categories: less expensive and more expensive. The next thing you need to do is to find out why you feel that your home is pricier than the less expensive comparable sales and cheaper than the more expensive comparable sales.
The Home Loan Advisor is a tool that was built to provide homeowners with insight into opportunities available in the current market, without having to shuffle through all of the clutter on the Internet. Not only does the Home Loan Advisor analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm, but we match you with potential lenders who have products that may help you and provide you with a sense of stability.
There are other ways to find out the value of your home. You can get a free home valuation report from Neighborhood IQ to find out your home’s worth to help you decide if you should refinance now.