When most people first contact a real estate agent about selling their home, the very first thing they want to know is how much their home is worth. They really want to see how much they can sell their home for if they put it on the market. I use what’s called comparable sales data to come up with a market evaluation range. I’ll explain more about what that means, but first, I want potential clients to know the market is unpredictable. Things change week to week.
In the San Francisco area, IPOs play a part. There are people who suddenly become crypto multi-millionaires and other people who suddenly end up with a great deal of money to spend on housing. The market is really hot right now, but interest rates have also been rising, which will likely change things. The market is always weird and always unpredictable. No one can accurately predict what your home will eventually sell for. That’s why I give potential clients a range based on an analysis of comparable sales. There are several things we take into consideration when comparing homes.
The floorplan of the homes should be similar, with the same number of bedrooms and baths and roughly the same amount of square footage. You’ll want a similar lot size, too. The homes need to be about the same age and in a similar condition to directly compare the two. If one home is nicely remodeled and the other one hasn’t been remodeled in 30 years, we’ll try to estimate the cost of remodeling and how much a buyer would value that remodel. Then, we’ll subtract the amount to come up with the range for a non-remodeled home, that’s otherwise almost identical.
We try to compare homes that are in a similar location with similar views. Even in the same neighborhood, there could be differences. For example, a home facing the train tracks may sell for less than a home that’s not facing the tracks. Things down to the same school district are also important in comparing sales. It’s a bit easier in neighborhoods where homes are very similar to each other already.
Of course, there are lots of neighborhoods in the Bay Area that have homes that have different floorplans and different sizes. Some were built in entirely different years. They may have different views and be in different parts of the same neighborhood. In any case, we must do our best to find the most comparable sales data. Once I have all the information and I’m able to look at it, I present it to potential clients and help them understand how I came up with a range for their own home.
Sometimes potential buyers interview multiple agents in the beginning. I try to keep my range conservative, but realistic. I’d rather clients have something to plan for and be pleasantly surprised in the end than have the market shift, the home sell for less, and the sellers disappointed. In a hot market, there’s still a good chance of getting a price above the range. I want clients to have all the data and review it with them, so they understand.
A lot of times potential clients come to the same conclusion I did after reviewing all the data. Some clients will get a higher number from another real estate agent. I’ve found sometimes people who opt for the non-conservative number end up with a home priced too high that doesn’t sell and sits on the market. In this case, you may have to go through multiple price drops and then the home ends up selling for a lower price than it could have originally. That’s why it’s so important to work with someone transparent and honest from the beginning of the home selling process.
Here are my two recommendations:
- Do some research online and look at some of the recent sales data around your home.
You can find it on places like Zillow and Redfin. Hiring a professional can help you analyze the data and come to the best decision for pricing your own home. A qualified agent also knows what buyers like and don’t like. We can help you understand the deal makers and deal breakers for homebuyers right now.
- I also recommend working with an agent who is realistic, honest, and transparent.
An agent should have your best interests in mind and be putting you in the best position for a successful sale. Don’t just go with someone who gives you the highest price because they may not be able to deliver.