The Number One Thing to Understanding Home Value: Comps
If you are selling a house in southwest Virginia, you know that the market is continuously changing. It is so important that you are selling your home for what it is worth, but this will require some research. Pulling “comps” on the market will help you maximize your investment.
So what are comps? It’s short for comparables. Comps compare your house to others on the market to determine market value based on inventory. When calculating comps, things such as interior finishes, updates and renovations should be considered as those could be advantageous to many buyers. Assessing comps will give you an idea of what needs to be improved in your house as well as an approximate return for the renovations. Then, you’ll take that number and average it against what people are selling for. Next, simply add the value of any renovations you have made, if any, to the current value of your house, and it will give you an approximate price point. This will help you discover the current value of your home, allowing for you to maximize your investment.
One of the things you want to look for is similarities. Look for homes like yours, in similar if not the same neighborhood, that have the same amenities to compare. For example, if you have a three-bedroom, three bath home, then you want to compare your house to others in your neighborhood of the same size. To that end if there is a fourth bedroom, then you have to add more money to it and it’s not an equal comp. Other things to consider are lot sizes, garage/parking space, general upgrades made to the home and school districts.
When calculating comps, try to maintain realistic expectations while also thinking competitively. The asking price of your home is important to attracting buyers. Be aware of the danger of over-renovating. Therefore, understanding comps prior to renovating is important because your house is only worth what the market is willing to buy it for. This means that it must be in the same ballpark price as the other homes in your neighborhood. You want to be careful not outprice your market.
One last tip is to try and remove emotion when calculating comps, and we know how difficult that can be. Whenever you’re assessing your home’s value, consult with experts who want to see your home sell for a competitive price without sitting on the market for an unnecessary period of time. Your local real estate teams are able to educate and advise you in determining your market value. We understand that selling at home can be an overwhelming process and it is always our goal to relieve some of that pressure.