One of the most critical decisions facing all home sellers is how to price your home. When you price your home correctly from the start you avoid leaving money on the table or having your home sit on the market. But how do you determine the best selling price for your home? That’s where comps come in, and why choosing comps correctly is important. Let’s take a closer look at what comps are and how to choose comps for your home sale.
What are comps?
Comps are a way to help sellers and their agents figure out the best selling price for a home. Short for “comparables”, comps are recently sold homes in your neighborhood with similar features to yours. By finding comps in your area, you can feel more confident that you’re listing at the right price. But when looking for comps, you must compare apples to apples. The following items are those that you should take into consideration when finding comparable homes to yours.
Location
Look for homes that are in the same location as yours. Typically, this means within a half-mile radius of your home. Neighborhoods and their amenities certainly play into the value of a home, so finding a home nearby to compare is essential.
Size
Size is also important when choosing comps. If the home you are selling is 1,500 square feet, then you will want to look for homes that are also around 1,500 square feet in size.
Number of bedrooms and bathrooms
While size contributes greatly to a home’s value, so do the number of bedrooms and bathrooms. Often, though, the number of bedrooms and bathrooms is more important than the overall square footage of the house. For this reason, look for homes that have the same number of bedrooms and bathrooms as yours. Buyers are generally more interested in the functionality and utility of a space than its overall size.
Other details
While the three characteristics above are often the most important details when finding comps, other details can also contribute to a home’s value. For example, if your home has an amazing view of the surrounding landscape, then you will want to find comps that also have a great view. If your home sits on a large and private lot, then you’ll want to look at comps that also offer the same. In addition, if you’re selling a townhouse or a condo, then you’ll want to compare it with similar units. This means if you’re selling an interior unit you’ll want to compare it with other interior units because of fewer windows or greater noise from other homes.
How do you find comps?
Finally, when you’re ready to research comps in your area, start by searching online for recently sold homes in the neighborhood. Look for those that are similar in size, condition, and amenities as outlined above. In addition, your real estate agent can offer valuable advice when it comes to determining comps. They can access the MLS (multiple listing service) for more comprehensive information and also rely on their knowledge and expertise of the local market.
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