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Columns: Real Estate Adviser
Steve McLinden   Expert: Steve McLinden
Real Estate Adviser
Determining recent real estate sales prices
Real Estate Adviser

How accurate are home 'comps?'
 

Dear Steve,
I read your column "8 Moves for home buyers, sellers in '08," where you mentioned that sellers need to examine the recent selling prices of homes comparable to theirs, then determine what the original list prices were to more accurately price their homes. Other than an agent, where can I find this information? How accurate are such "comps" when determining your own sales price?
-- Sherrie

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Dear Sherrie,
There are several ways to get this information, but there is no one centralized Web site. Web sites such as Homekeys, Redfin and Zillow have some pretty accurate comps with slightly different service offerings and links. You can get your home listed on the MLS for a set fee through these and many other real estate Web sites and get "comp" reports and sales histories as well, including original list prices.

Some listing agencies in your neck of the woods will likely run "comps" of varying depth for you for free, hoping to get your business as a full-fledged agent representative or sale facilitator.

Some counties where sale prices are public record will post sales data online, although you won't be able to get the original listing price. If you have the benefit of time, you can personally track the sales-price history of new listings in the newspaper, real estate magazines and Web sites and see how or if they are repriced as the weeks and months go by. For additional reference, pick up sales literature from those ubiquitous flier boxes in the front yards of for-sale homes, then check with your local appraisal district to see what the home's tax appraisal value is. Most tax appraisals are now online.

Unless you're in a rural area, your "comp" list should include homes no further than a half mile away. Although conventional wisdom has had it that you can go back as far as six month to get "comps," I would put more credence in the homes that sold in the last two to three months to get the most accurate picture in this ever-changing sales climate.

You can adjust the "comps" of slightly different-sized homes to relate to your home by, for example, reducing the price of a 2,000-square-foot home 10 percent to price your 1,800-square-foot home. But realize that the price per square foot of a house rises as its dimensions decrease. In other words, larger homes have a lower per-square-foot cost and smaller homes have a larger per-square-foot cost. So adjust accordingly.

And keep in mind there's more to pricing strategy than just "comps" and appraisals. In the end, even the most carefully considered price is still an educated guess. The market, not the seller, will determine if the price is too high (few or no offers) or too low (many competing offers) or if there are simply too few legitimate buyers at this point in the real estate cycle to even justify selling unless you really must move. Pricewise, it might behoove you to wait until 2009 if possible. Presently, there are more flat markets in the U.S currently than there's been in a very long time. But who really knows when things will improve?

Bankrate.com's corrections policy -- Posted: Jan. 27, 2008
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