Four Situations In Which The Hyped Sales Comps May Fail You
Setting the right price is one of the most difficult things to do when it comes to houses for sale. The most trusted way to do it is to compare the house with recently sold similar houses in the area. Unfortunately, even that can still fail you under some circumstances, such as these four examples:
Yours Is the Best House on the Block
The best house in a neighborhood will always be poorly priced because it doesn't have true comps. Maybe you have the best pool, a bigger yard, better trees or even the best finishing of all the houses in the neighborhood. In such cases, you will always be comparing your property to inferior properties, and the pricing result may not be accurate.
You Live on the Edge of Your Neighborhood
If you live on the edges of a neighborhood, then your house may be priced based on comparative sales that aren't exactly in the same league as your house. This is possible because some neighborhoods aren't that well defined, and it may not be easy for outsiders to determine where a neighborhood starts and ends. Don't forget that location is a key factor in property valuation so even if your house is similar to another one in a bad neighborhood, they should still not be compared.
Your House Has a Larger Square Footage
It is common to use the number of rooms (or even specifically bedrooms) when comparing houses' sizes. For example, if you are selling a four-bedroom house, you are likely to compare it to another four-bedroom house within the same neighborhood. However, this isn't exactly right because two houses with the same number of rooms can have different sizes (in terms of square footage). If your bedrooms are larger-than-usual, for example, then comparing it to another house with conventionally-sized bedrooms will do your house a disservice.
The Comp Had a Serious Negative Feature
A single negative feature can seriously impact the price of a house. Therefore, if your house is perfect (except, maybe, for cosmetic defects) and it is being compared to a house with some serious defects then you are unlikely to reach the true cost of your house. This is even more likely if the defect in the other house wasn't advertised. For example, if the comp had hidden termite damage and your house has never been infested with termite, then you may end up undervaluing your house.
