Pricing your home depends on many factors, but one of the largest is the sales price of recently sold homes. It seems odd that other homes would determine how much you can ask, but it’s a part of the fair market value and how lenders ensure the home is a smart investment.
When an appraiser looks at your home, he/she will also look at the area’s comparable sales as a foundation. They use this number and then adjust accordingly based on your home’s features, upgrades, or even lesser differences that lower your home’s value.
So how do you determine the sales price of recently sold homes? Check out our tips below.
Talk To Your Real Estate Agent
- Go directly to the source. Real estate agents are in the field daily. They know the price of recently sold homes. If they don’t know offhand, they have the resources to find out instantly.
- Real estate agents use the MLS – which is the system that feeds all real estate data sites, like Zillow and Redfin. Besides getting the answers fast, real estate agents know which homes are most comparable to yours. Comparing your home to one that’s nothing like yours won’t help your sales price.
- A real estate agent offers the most accurate information. Find yourself a reputable agent before you start.
If you’d rather do some sleuthing yourself, the internet is a wealth of information. Don’t take the information you find at face value, though. Always confirm it. Using the internet is a good starting point if you’re just thinking about selling a home.
When you’re ready to put it in the market, though, we suggest confirming the price with a real estate agent who knows the true prices of recently sold homes.
A few online resources include:
- Zillow – Search for homes in your area and filter by ‘Recently Sold.’ Stick to homes within a mile of your home (closer is better). Because Zillow gets its data from the MLS, it should be accurate, but again, double check your numbers.
- Trulia – The Trulia U.S. Public Records database shows the latest sales prices for all homes in the area. You can see not only the most recent sales price but the previous prices too.
- RealtyTrac – Click on the ‘Sold’ tab in RealtyTrac’s database after searching in your area and you’ll see the sold price and sell date of homes in the area.
Know What You’re Comparing
No matter where you get your comparable sales information from, make sure you’re comparing ‘apples to apples.’
The websites above are great starting points. But you don’t know the situation that led to that number. Was the seller trying to sell fast to avoid foreclosure or to relocate quickly? Was there a bidding war that allowed the seller to get top dollar?
Without a real estate agent’s help, you won’t know the details. But, they are a great foundation. They give you a starting point. From there, you should adjust your sales price based on your home’s features.
What makes your home better or worse? What features does your home have that the comparable sales don’t and vice versa? If your home has features comparable sales don’t, you can increase your asking price. If the other homes have features your home doesn’t, you should charge slightly less than what they asked.
Ideally, comparable sales will be the same square footage, the same number of bedrooms, and even levels in the home. For example, don’t compare a ranch home to a two-story home unless it’s absolutely necessary.
The same is true of distance. The closer comparable sales are to your home, the more accurate the pricing. While you can use homes located within a mile of your home, closer homes offer a more accurate picture of your home’s value.
Put all the factors together to come up with your home’s sales price. It’s not an easy task. Get the help of a real estate agent and combine it with your knowledge to feel good about the price you ask for your home.