If you are considering selling your home, one of the first questions you will likely want an answer to is how much your home is worth. When you hire a selling agent, they can provide you an idea of a fair market value of your home. Some of the factors they will consider are listed below. If you are ready to find out more about your options in listing your home, contact Berkshire Hathaway HomeServices at (310) 373-0021.
Comps of Recently Sold Homes Will Be Considered
One of the most important factors involved in determining the market value of a home is what similar homes are selling for in the area. Your agent will use a Comparative Market Analysis, also known as a CMA or Comp. This is a completion of recent sales in the area, with information on how many days the homes stayed on the market, their final sales price, and other important details.
If you are not working with an agent, you can search online to find recent sales. However, the amount of information you will have on a home will be limited. For example, a home that has similar square footage and the same number of bedrooms one mile from your home should be very comparable in price, right?
Yes – unless there is a serious issue with it (such as a basement that always floods) or something that helps increase the value (such as a newly remodeled master bathroom). Your agent will be able to more directly compare your property to other recently sold properties.
If you decide to do this research yourself, make sure that any comps you use are within .25 miles to .50 miles of your home, were listed within three months, and are about the same age as your home. They should also be within 10% of your home’s square footage. So if your home is 2,000 square feet, you should only look at homes that are between 1,800 and 2,200 square feet.
Don’t Get Lumped in with the Competition
You do want your home to get a fair price but you do not want your home to be lumped into homes with similar prices because this can cause a problem known as price banding. Price banding occurs when someone gets overwhelmed by how many homes are within a single price point and instead moves up or down the scale to a less crowded price point.
Price banding can happen naturally as sellers try to compete with each other, but it can be bad for business. If you see that there are a dozen homes for sale between $270,000 and $274,000, and then nothing until $290,000 then $280,000 can get you more interest in your property than if you priced within the other popular pricing points.
If you are ready to determine how much your home is likely worth then we welcome your call to Berkshire Hathaway HomeServices at (310) 373-0021. We can help you find the best way forward.