When you list your home for sale, one of the ways to determine the asking price is to look at comparable sales. By reviewing recent sales, you can gauge what someone was willing to pay for a similar property. There’s rarely a perfect apples-to-apples comparison, so let’s see what criteria is most important to consider.
The biggest factor at play right now is the last on the list: Supply and Demand. Historically low inventory, coupled with high demand, is pushing rapid appreciation. So while the condition and configuration of past sales serve as a guide, it is common to see new highs with each subsequent sale. It’s a great time to sell – but also a good time to buy. The average of 7 key forecasters predicts that home prices will rise 6.1% this year.
Location, Location, Location
One main factor that determines a home’s value is its location. Homes in the same neighborhood typically follow the same market trends. Comparing your home to another in the same neighborhood is a good start, but comparing it to homes on the same street or block is even better.
Date of sale
It varies by location, but housing markets can experience a lot of fluctuation in a short time period. It‘s best to use the most recent data available, ideally within the last 90 days. If there aren’t enough sales a lender might go back six to 12 months.
Home build
Comparing homes with similar architectural styles, numbers of bathrooms and bedrooms, square footage, layout and other basics is helpful.
Features and upgrades
Remodeled bathrooms and kitchens can increase a home’s price, but so can less flashy upgrades like a new roof or HVAC system. Be sure to look for similar bells and whistles.
Supply and demand
The local real estate market has an impact on home prices. If there’s a high demand for homes in your area and not enough supply, your home’s value may go up, and vice versa. The rate at which similar houses in your area are currently selling for is a good indicator of supply and demand pressures.
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