Rely on Agent Knowledge and Experience
By Melissa Forte-Litscher
In real estate, like any other industry, we have our own jargon. Oftentimes, there are terms repeated so much that sometimes we think everyone understands what is meant by them. Take for instance the term “Comps.” This is short for the real estate term “comparables,” which are houses that are similar in size, location and condition to a house you are selling or buying. With so much information readily available, many people want to start the process on their own before calling their favorite agent.
So, let’s look at what makes a good comparable. Comps should be selected in an objective manner, not to simply justify what you think or what you want to hear. For example, you might instinctively point to a house that sold for more, because you are selling and want a higher value. You might also find a lower priced home just because you want to make a “lower than asking price” offer. Neither of these strategies will help you in your sale/purchase, and any lender involved is relying on an appraiser’s results for setting the loan amount based upon comps. Your trusted real estate agent performs a CMA (oops, there’s another term), or comparative market analysis, finding comparable houses and selecting those most like yours to assist you in setting the best price or making a well-received offer.
At times, it can be pretty difficult for an agent or an appraiser to find enough homes like the house you’re selling or buying that have recently sold. Ideally, we are looking for houses that are in the same neighborhood or area that are also similar in lot size, square footage, age, number of bedrooms, bathrooms, and other rooms. We also need to consider a home that is in similar condition in regard to updates and maintenance. Lastly, we are looking for homes that have sold in the last three to six months. The goal is to find three comparable homes that are currently on the market, three that are currently under contract, and three that have closed within the past three months. We then use all three in combination to determine a listing price for the seller or an offer price for a buyer.
In this shifting market we’re experiencing, it’s hard to find enough comps, or know where the market is going. Because it takes time for houses to close, the data can be a bit behind. Your best bet right now is to use comps as a starting basis, but also rely heavily on your agent’s experience and observations of what is currently happening in your area and price range. If you are looking for someone skilled at finding good comps, give me a call. Whether you are ready to find out where you should price your home or to make an acceptable offer on your new home, I’m at your service.
As part of the NextHome family, putting #HumansoverHouses is essential. I love what I do, which is help people through the stressful real estate situations they find themselves in. Sometimes that is happy stress like getting married or having children and needing a larger place, and sometimes it is more difficult like the loss of a loved one or going through a divorce. Sometimes it is the stress of relocating, in or out of our area, and sometimes it is just finding your “next home.” Wherever you find yourself, you can easily find me, by your side guiding you when you need it, or just being here to discuss options. I’m at your service when you want someone to walk with you through the process of buying or selling real estate.
