Question:
“Hi Gary. I’m trying to find out what my rental property will sell for and am sending you the four comps another agent sent me. He said to look at the ones for sale and price it just under them and I should get about that price. Two of them are in a much better area, but he didn’t adjust for that, so I’m a little confused. What do you think?”
Answer:
Yikes. I think we have a few problems here!
First…
“Comps” is short for “comparable sales,” so those aren’t comps.
While you do want to look at your competition to set a limit on what you can get, you can’t price a property based on what other people are asking and haven’t gotten yet.
If someone with a property identical to yours is asking and unable to get $X, all you know is you can’t get $X either. But you don’t know what you can get.
Second…
I’m not sure if that agent didn’t know the difference in neighborhoods, was too lazy to adjust for it, or for some crazy reason didn’t think it mattered.
As the saying goes, real estate is all about “location, location, location!” So to not adjust for the different location makes no sense.
So ideally you should only compare to (sold) properties in your area. But if you must go to an inferior or superior neighborhood, you must adjust for it.
Frankly, and I know it’s in my self-interest to say this, but you should kick that agent to the curb and either work with me or another agent you like.
