Question:
“I know you’re very accurate at determining home prices. What is your process?”
Answer:
There are several steps I take when setting home prices:
- Use nearby sold “comps” (comparable homes)
- Analyze nearby sold homes to see if any are comparable
- Find the most comparable and adjust for differences and market changes
- Analyze a broader community (if step #1 is not sufficient)
- Find comps in similar neighborhoods
- Look at the average sale price AND individually compare some of the most comparable homes
- Analyze the competition, or homes currently for sale, to see how we compare. This is critical, because in a declining market there may be homes for sale below what the comps indicate. But in an increasing market, there may be almost no homes for sale, indicating we should get more.
- On a hard-to-price home, I ask my expert buyer-agents their opinion.
You can see this is mix of science and art. Much of it is subjective, and that’s where experience is critical.
