Comparables – What are they and why you should care!
This has been a week of lots of comparing of homes for sale for our team. We have been dealing them for both buyers and sellers. You might not think that Comparable Sales (comps) are all that important, but you really need to pay attention to them. Because if you don’t, you may be caught off guard and see a deal blow up in front of your eyes. The comparable sales we look at help us assist home sellers determine their list price and home buyers decide on their offer price on a home they want to purchase.
Why would this be so important? Well let’s start with that whole mortgage crisis mess we have been dealing with the past few years. Banks are now looking at the appraisals very closely and they are more strict in the criteria. Which means trying to compare an apple and an orange isn’t going to fly. It reminds me of the Sesame Street song “One of these things” song that I used to watch when I was a child.
Read Also: What is a Real Estate Appraisal?
Time and again we are faced with a home that another agent has listed that is over priced and when we run the comps we cannot come up with that number using some basic rules to compare homes. Gone are the days where competition for a home was fierce and people were purchasing all cash.
Home Sellers that understand this are able to sell their home faster and move on with their lives. Home Buyers already understand this and are writing their offers to reflect their knowledge of the market. So when a home seller comes on the market in an area that is saturated with lots of listings with a realistic asking price; they find themselves with multiple offers within the first days of listing it for sale.
When a Realtor(c) puts together a list of comparable properties for you they follow some general rules:
- Should be the same style home
- Similar square footage
- Age of home
- #bedrooms, baths and similar features
- Similar lot size
- not comparing single-family to a condo or multi-family home
- upgrades and enhancements comparable
- Be within a mile of your home
- within the same school district
- the closer to your home the better
- Sales should be in the last 90 days
- Is it a distressed sale (Short Sale/Foreclosure)
- Was the house sold furnished or unfurnished
- Incentives? Seller’s Concessions involved?
Let’s face it, there are many factors that go into the decision about the comparable homes for the home you are working on establishing value on. If there is not recent sales the area is expanded then there is the general rules of value that you can adjust. But when we are faced with this; we usually will call in an Appraiser as they will be more qualified to determine the value of the home.
Thinking of selling your Erie County home? Interested in finding out the current market value of your single family home, condo or investment property? Then call www.BestBuffaloHomes.com at (716) 650-0051 to discuss what is happening in today’s Western New York Real Estate Market. We would be happy to give you a personalized Comparative Market Analysis for your home or assist you to purchase a home. View additional WNY Market Area Statistics here.