You’re ready to sell your home. Maybe you’re downsizing, pursuing a new opportunity, or merely responding to a life event. Whatever the reason, sooner or later, you’re going to hear the words “real estate comps.”
If you’ve ever wondered what the term “comps” means, you’re not alone. It’s a question we answer for clients regularly.
Comps – or comparable sales – are the value of homes in your neighborhood, as compared by property condition and size.
For instance, if your home is a 1,800 square foot bungalow in well-kept condition, it makes sense to look at other comparably sized homes to determine your pricing.
This is a handy metric for sellers and buyers alike. Sellers look to real estate comps to help determine their listing price, and buyers rely on comps to help them place offers they feel are appropriate.
Let’s explore how to use your area’s comparable homes in a way that helps you get more for your listing.
Where you’re selling is as important as what you’re selling
The overall value of any home is determined mainly by its location. For instance, a palace in an area with lower comps could sell for less than a fixer-upper on a street with higher comps.
Housing markets are primarily driven by location. One or two streets can make a difference in the ever-changing world of property markets.
If you live in a less densely populated area, your comps will most likely consist of a wider radius of properties. In cases like this, a school system, event center, or access to public transportation can play a huge role in how a home is priced.
When you list is as important as where you list
There are many reasons why people sell their homes, including unforeseen circumstances. This means that not everyone can choose when they place their home on the market. Even with expected listings, understanding comps can still play a role in getting you a good price for your listing.
Here are some benefits of using more recent real estate comps in your pricing strategy:
- There can be seasonal advantages. If you’re selling in peak summer months, pending comps may reflect higher seasonal prices, which you can use to justify more money for your home.
- A real estate professional can better serve you. The professional you’re working with to sell your home will use comps to list the property. Understanding how comps are informing their pricing recommendations empowers you with more information to work with throughout the process.
Speak with your Realtor® about how timing and comparable home values can work together to get you better results.
What about your home vs. others?
They’re called “comparables” for a reason.
Does your landscaping need some sprucing up? Is your curb appeal beckoning buyers from the street as it should be? Is your kitchen updated to present standards? Is your property turnkey or in need of TLC?
All of this will matter when pricing your home in-line with others in your neighborhood. Ask your listing agent how to help your home shine on the market. You can sometimes make changes to optimize how much you sell your home for.
Livable space is key when it comes to pricing
The temptation to go tit-for-tat with neighborhood real estate comps is understandable, but don’t get too carried away. There’s a lot that goes into determining a home’s market value.
One crucial factor to consider when pricing your home is the amount of livable space your property offers. Livable spaces are areas in the home like living rooms, bedrooms, family rooms, and more.
By contrast, usable space refers to places like garages, basements, or attics. Ideally, a home offers a sensible balance of living space and functional space. Ultimately, livable space is more valuable to buyers. Most buyers will generally prize bedroom and bathroom count over a vast garage.
Talk with your Realtor® and get a realistic rundown of how your home makes use of its space.
Are you ready to learn what your home is worth?
We specialize in getting homeowners more for their listings. We work with sellers every day to empower them through life’s most important transaction.
We offer a free tool for potential sellers to explore what their home is worth. Click here to enter your address and begin your home selling journey.
Still have questions about your neighborhood’s housing market? Great! Contact us for expert solutions & your free neighborhood market report.