What to do when there are no comparable homes
Unless you live in a newer neighborhood with cookie-cutter homes, this is a common problem in Nashville.
Many neighborhoods close to the downtown area or in the rural areas outside of Nashville have the full range of ages, styles and conditions of homes. Having options is wonderful, until you attempt to determine a reasonable sales price for a home.
This is just as troubling for buyers because they want to ensure that the price they are paying is appropriate.
So what do you do in this situation?
One option might be an appraisal. However, it’s not always the best option to set a listing price.
Another option would be to partner with a trusted real estate agent. They have access to more information than the average homeowner and a greater understanding of how to use it to set a price.
First, understand when people say there are no comparable home, what they really mean is that there are no similar homes. If all homes were similar, you wouldn’t need a professional to help you set the price. You could just look at the last home sold and accurately set the price yourself.
Second, you need to find a handful of homes that are the most similar to yours. And inside that handful of homes is a recent sale that is more like your home than any other sale. It’s this most similar sale that will be your gold standard. You will give this one sale more authority in your analysis.
Third, complete an in-depth comparison of your home to the one sale that is most similar to yours. Determine all off the differences between the two homes including age, condition, quality of construction, location, lot, and anything else that is important to buyers in your area.
Fourth, assign a dollar value to each of the differences that you have identified and apply those numbers to the price of the most similar sale. This is the tricky part and where most people fail. Its not as simple as the cost to upgrade because you have to understand the value to the consumer. Buyers appreciate the quality of work in a home, but they may not pay you more for it.
Lastly, look at the recent listings and pendings. Do they show any market trends that you need to factor into the price. Our analysis was based on a past sale and the market may have changed since that time.