Recent comparable sales, often called “comps” for short, are causing a great deal of confusion for sellers.
RIS Media reports that the latest Quicken Loans Home Price Perception Index shows that homeowners on average price their homes two percent higher than the valuation of professional appraisers.
Bob Walters, Quicken Loans chief economist, said that while two percent might not seem that significant, “it could make a huge difference in metro areas with higher average home values.”
Quicken's report suggests that those who're not keeping up to date with real estate prices are especially vulnerable to overvaluing their homes. It adds that comparables need to be adjusted due to the latest market demand too, and that's often something sellers overlook. Comparable sales can date back to between one and three months or even more, but sellers also need to bear in mind what's happening right now in the present.
Steffy Hristova of HomeSmart in Scottsdale, Ariz., told RIS Media that her tactic is to help sellers visualize the latest sales data in their area to provide them with a more realistic picture of the comps. She also takes into account the latest market activity by applying a formula she's created:
“I adjust the price according to the following schedules,” Hristova said. “If there are showings and no offers, 4 to 6 percent off; if there are low showings, 6 to 12 percent off; if there are drive-bys only, 12 or more percent off.”
Hristova obtains supply, demand and sales data from both the local MLS and also The Cromford Report, which provides data specific to the Greater Phoenix Area, and reviews this on a daily basis.
Hristova says that as well as taking into account obvious factors like the number of bedrooms, bathrooms and square footage of a property for comparables, she also factors in things like location and proximity to noise, which could have a negative impact on the home's value.