|HOW MUCH CAN YOU SELL YOUR HOME FOR...AND HOW FAST CAN YOU GET THE MONEY?|
Or, What Do "Comp" Prices Really Mean To Your Home's True Value?
BARRY HURST SAYS: "In the real world of Atlanta real estate, most sellers want the most money they can get for their house-and agents like myself know that. But we also know that an OVERPRICED house will never sell at all...and the longer it sets unsold, the weaker the seller's leverage becomes."
WHAT'S A "COMP"?
"Comp" doesn't mean "complimentary!" It is real estate shorthand for "comparable neighborhood price" and is used to pinpoint--no more and no less--what comparable properties in the immediate area have sold for during a specific recent period. "I'm always sad to hear of a seller who's been talking with a real esate agent with 'low comps,' says Barry. Because even though that seller may have invested perhaps $15,000 in extras, I still have to tell them the agent was right. That they cannot expect to get that money back since the market--or 'comp prices'--simply won't support that much additional value."
"COMPS" WORK LIKE THIS
Comps, or "CMAs", as Realtors call them, are the best comparative analysis for determining what price your home should be marketed for in order to achieve the fastest sale. It works like this: When a Realtor such as hard-driving Barry Hurst succeeds in selling your family's home, he immediately notifies the area's Multiple Listing Service (MLS) of the price at which it was sold. MLS then stores that data in its computer for reference. And it is from that information that the next agent will start analyzing "comparative sale prices" when selling another neighborhood home. "Still," says Barry Hurst, "comps are only as good as the agent who is dealing with them."
"First of all," he explains, "not all three-bedroom, two-bath homes are created equal. Second, comps do not factor in changes in market conditions because they can change almost overnight."
"Six months ago," he explains, "your neighbor's house may have sold for $165,000, but today that same home may only bring $140,000. That's what a real estate agent is for. To know what the market is doing and why it is doing it."
SCRUTINIZE COMP PRICES
As Barry Hurst advises, the home owner should look very closely at the comps quoted by various real estate agents before deciding which one would do the best job at listing--and pricing-- the house for the quickest, most rewarding sale.
"On occasion,"Hurst says, "the computer may show a home comparable to yours as having sold for a high price. Those, you should be a little suspicious of--and require the agent to investigate further."
Be concerned, too, that if a number of agents have submitted three different proposed selling prices, even though all have been looking at the same MLS comp-price computer printouts for your area. "If one came in at $165,000 and another at $170,000 and another at $175,000," says Barry, "I would not be too concerned. But if one came in at $165,000 and the final price quote turned out to be $180,000, alarm bells should go off in the homeowner's head, even though a big price like that may be exactly what he or she wanted to hear. On the other hand, even if you like the agent who quoted $165,000," he adds,"there's no reason why you shouldn't go with the agent whose price you felt most comfortable with: $180,000."
Like Barry Hurst, most successful Realtors agree that the worst thing a seller can do is overprice a home. Because when it goes on the market at too high a price, chances are it will sell less for what it actually should have sold for--based on comp prices. Why? Barry Hurst puts it in a nutshell: "One," he explains, "why should a buyer spend that much money on your three-bedroom, two-bath home when she could get FOUR bedrooms and 2 1/2 baths for the same price in the same area?" "Two," Barry goes on, "By the time the buyer ratchets you down to a reasonable price, he or she may be skeptical of the property because it sat unsold on the market for so long. And three," this hard-driving Atlanta Realtor concludes, "You may have to reduce the price even further just to get the prospective buyer to come take a walk-through."
So before you list your home with any agent, see Barry Hurst first. Because he know how to floorboard the sale--without sacrificing valuable dollars. Be they "comp" dollars, or otherwise.
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