If you’ve ever sold a house, you know that pricing it is mysterious. Did you know that while it seems that your Realtor pulls the price out of the air, he
or she doesn’t? Your Realtor doesn’t determine price, the market does. A good Realtor just knows how to use the market to price your home. They use something called comparable sales.
Comparable sales or market comparison, shortened to comparables in the real estate business, are recent sales of homes that are similar to yours. It’s a method that is used by professional, licensed real estate appraisers for appraising single-family houses. It uses actual sales amounts for recent sales, not things like cost to replace the home, tax assessment values, similar listings, what it sold for when you bought it or what your neighbor says they think its worth.
Comparable sales may or may not be in your neighborhood. Unless you live in a cookie cutter neighborhood, where every house is the same size, values will be all over the map. Your 1500 square foot home on a half acre may be sitting next to a 2000 square foot house on an acre, or next to an 800 square foot bungalow on a tiny lot. Your house may be updated to the nines, but your neighbor two doors down may not have touched their home in 25 years.
Use homes that sold in the last 6 months
You should only use homes that sold in the last 6 months, in similar neighborhoods and close to yours. The homes compared should be similar in age (within about 5 years), size (within 300 square feet) and lot size. A comparable should be in the same area, but not necessarily the same neighborhood. Then check their past listing information to see if the home is as updated as yours, more or less. Then you can go through the process of figuring out the price per square foot of each similar home and use the average to find out the price per square foot of your own.
Or you can hire a professional to do it for you. An appraiser can provide the same comparable information for you… for a price. Your best bet is to ask a Realtor. They have access to the information and know how to get to a fair market price for your home.