If you owned a home for any period of time you might already be familiar with the term “comp” which is short for comparable property. These are like kind properties that have sold for a certain amount based on what buyers have been willing to pay.
However, sometimes sellers can be mislead by the numbers. When they go online to see what other homes in their area have sold for they frequently miss out on some important facts that can play a major role in how much a home sells for. Let me give you a few examples:
Location within the neighborhood. If the home is in a part of the neighborhood that borders a highway, train tracks, or some other less appealing area, it’ll likely fetch a lower price in comparison to one that sits in the cul-de-sac with three other homes that back up to the woods and have stunning curb appeal.
The home’s lot. Hilly terrain can affect the usability of a home’s lot. A lot on a steep slope may be far less usable than an identically sized adjacent lot.
Renovations. Homeowners who have done home-improvement projects typically see a higher price for their property when they made the right choices.
New Construction. If land cost are lower than what it had cost to build your home at the time of your purchase chances are the builder is likely selling new homes for less. This can have a dramatic impact on the comps in a neighborhood and usually result in the seller taking a significant loss on the property.
There are many other variables to consider when analyzing comps but for starters just know that you don’t want to assume a price when you first look at the numbers.