Generally speaking, when it’s time to buy a new house, home hunters are looking for the smallest price and sellers are trying to negotiate to their benefit. Thus, the only valid solution in this case is to pull the comps, as the housing specialists say. If you have an agent who will help you find your perfect home, then he / she is going to search for the best price. When setting the price, the comps have a very important role. A list of homes that have been recently sold and that are similar to the one you’re interested in will give you an overall perspective of the market. Read on to find out how to select the best comps from that list.
First of all, the location is extremely important. Make sure to select only comps that are located nearby your address. This isn’t, of course, a general rule. A comp that is situated close to yours might not always be extraordinary because it could be too close to a freeway or main arterial or it might be located on a hill. On the other hand, you could spot a great comp that’s a mile away from your house. However, it has the same market characteristics you’re looking for. It might be far away, but it’s a better comp for you. Don’t forget to compare only the comps that are part of the same development since they were built by the same developer or builder around the same time.
Choosing recent comps
Next, remember to choose recent comps. Homes that were recently sold have the best features. However, slower markets might not work according to this rule. Still, the general statute is to opt for comps that were listed in the last 4 months. If you cannot find anything within this time frame, you can look at comps dating from 8 months ago.
Square foot price
Additionally, you should always take into consideration the price for each square foot. This is a crucial method when evaluating the real estate market. This factor depends on the property’s condition and the location choice. Even though 2 homes are located in the same area, they might have different interior finishes and their prices could vary. One house could be finished with stock cabinetry, vinyl and laminate, while the other one could feature hardwood floors, marble baths, custom cabinetry and granite countertops. Moreover, it depends on how was the residence measured and if it also includes the detached buildings and the garage. You should also think about lot size. It’s needless to say that a larger lot will value much more than an insignificant one.
After you’ve evaluated the details and compared the numbers, you must also consider some individual features. You cannot quantify them as easily as the above mentioned factors, but they are extremely important. Some of the things you need to take into consideration are the neighborhood and how close it’s located to shops, cafes and restaurants, the condition of the exterior, the nearby schools, the noise and traffic and the curb appeal. It might take longer to decide whether or not a home is proper for you, but in the end you’ll take the best decision.