Essentially, a home is worth only what someone will pay for it. The selling price depends on the state of the local market, the condition of your home, and economic conditions—particularly mortgage rates and consumer confidence because those two issues impact affordability and the willingness of buyers to negotiate.
Real estate comps, formally known as a comparative market analysis, should take data about all those types of homes into account when evaluating your own home and its current market value.
Comparable homes are those within your community that are similar in size, with properties close to the size of yours, and built around the same time. The number of bedrooms and bathrooms and the amount of finished living space should be the same as your home. If your home is smaller or larger than the comparable ones, we can estimate the difference in your home’s value.
In addition to the basics listed above, comps also must take into consideration the condition and style of your home, the layout, the quality of the construction, the materials used, and any special features. For example, if your home has an exceptionally high-end kitchen compared to others in the neighborhood, we may increase your estimated home value. On the other hand, if your home has two full baths and others in the community have three full baths, your value could be a little lower than other comparable homes. The amount added or subtracted from your home value for a particular feature, such as a swimming pool, isn’t an exact science, but our experienced pricing specialists with knowledge of your community can make an educated guess.
Our pricing specialists will also factor in market conditions. If there’s an imbalance with more buyers than sellers, your home’s value is likely to be higher than recent sales since competition can drive up prices quickly. If the market in your area has slowed and sellers are competing for buyers, then your value could have declined.
To find out more about how accurate pricing can affect your homes value and interest level, go to The Power of Pricing Competitively.