Home Selling in 59711>Question Details

Gordon Nicho…, Home Buyer in Anaconda, MT

How do I price a home for sale when no comparables exist?

Asked by Gordon Nichols, Anaconda, MT Sun Feb 13, 2011

Our home is one of very few in town in this price range. It was appraised for 620k 5 years ago, but comparables were made in areas far away. It is 4000sq. ft. upper and 3500 sq. ft. lower and is in the nicest part of this small town. We have finished the lower part which was not done when the appraisal was made and put in a kitchen and laundry making two complete living areas. We also added a 500 sq. ft. four seasons sunroom with lots of curved glass. We also subdivided the 21 acres into four separate lots with 7 acres, creek, and pond on lot with house on it and put in roads and gravel parking areas. It was designed to have garage added which has not been done. There are many fine features too much to list here. How can I realistically price this house for sale in the current real estate climate? I would like to sell as soon as practical and possible. Thank You

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Connie De Groot - (310) 913-1184’s answer
You might look in an adjacent neighborhood You also want to look at the median, high and low values for your area. If you have over improved this house for the area then you most probably will not receive the full value of your improvements. Rule # 1- real estate values are about LOCATION. What I would do before putting it on the market is have several agents that work your area, price your home. You might also consider an appraisal. If you do not like what the agents tell you then you should wait until things are better. Also, beware of the agent that states a very high price as they may just be telling you what you want to hear. Go with the pricing that has the most voices! Pricing your home wrong will lessen your net profit!
1 vote Thank Flag Link Mon Feb 14, 2011
Some investors (myself included) will use a weighted average that's based on the average price/unit for the recently, sold properties and one for the current listings in lieu of comps. I sometimes will perform those calculations independently for the land and the improvements. Ultimately, I'll use all of that data to build a math model which I'll use to determine the current market value of a property.

Like Andy, I'd also analyze the price trending, and I'd incorporate the results into my math model. Another important factor to consider is the exit strategy/strategies that I plan to use for the target property, and I incorporate that into my math model too.

Depending upon how creative and flexible you are, the more likely you'll be able to do a deal closer to the numbers you'd like.
0 votes Thank Flag Link Mon Feb 14, 2011
Your best bet is to seek teh advice of teh progfessional in your area, most real estate brokers and agents will offer you a free broker price opinion, you can use this time to see what and how they value your home and what they have to offer to assist you in seling your home.

You can also hire a professional appraiser, let them know what type of valuatiojn you are looking for and ask them for detailed explanation of how they arose at that value.

There are several types of ways to arrive at value, all have pros and cons, so why not see all of tehm to assist you in getting a realistic number, the bottom line is though, a property is only worth what a buyer is willing to pay for it. good luck with your sale
0 votes Thank Flag Link Mon Feb 14, 2011
Gordon,

To be honest with you, all of the answers you have received so far are good ones, but I think the most important factor is that you hire an experienced agent who has the strongest marketing plan, and listen to what that agent suggests. You may be surprised by either a higher suggestion than you thought, or a lower one.

Abouth 5 years ago, I sold a house in a little beach community called Chesapeake Beach. Unbeknownst to me, my seller had contacted 3 local agents, and myself (my office was 30 minutes away) The local agents told him $325K max, (which was based on the comparables) but I fealt that his home was unique and could easily get $425K. I sold that house in 5 days for $425K.

When I price a home, I think of it from a buyer's perspective, and what other homes on the market are most like my listing. Sometimes, I have good news for my clients (a price higher than they expected) and some times I have bad news ( a price lower than they expected)

What I usually tell them if they insist on pricing it higher than I think it will sell for is this, "There is nothing wrong with overpricing a house, as long as once you realize it is overpriced, you do something about it"

If you don't have an offer in 30 days, you are probably overpriced.
0 votes Thank Flag Link Mon Feb 14, 2011
Hiring a certified appraiser seems to be the best avenue for you.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Mon Feb 14, 2011
Gordon, We recently listed an antique home that could not be compared with any in the area. The Seller hired an appraiser and we based the listing price on that. It allows the Seller to refer to the appraisal when justifying and negotiating price. Around here it is about $300.00 on average and money well spent.
0 votes Thank Flag Link Mon Feb 14, 2011
Gordon,
An appraiser uses multiple approaches when trying to determine value. When the comparable approach isn't the most appropriate, a cost approach is often used. Basically you break down the components of the land and property and use comparable land values plus and estimated cost of construction less any depreciation. Due to the declining market, full replacement value may not be accurate so this may be the top of the range.
0 votes Thank Flag Link Sun Feb 13, 2011
It is challenging arriving at a price on such a unique property. I would likely look at pricing trends across all sectors of the local market and then weigh that against trends in high-end pricing statewide. I'm thinking that it may not be a local buyer, but rather someone who also might be looking across western montana overall. You might be competing against Rock Creek, Wise River etc. for your buyer. It might be worth spending a few hundred bucks on an appraisal, but that only helps with pricing and doesn't help you find a buyer. The market still seems weakest on high-end properties, and the few buyers in that range are expecting screaming deals. I still think some creative options might be available to you. Best wishes!
0 votes Thank Flag Link Sun Feb 13, 2011
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