Listing Triangle™ - Front Street Brokers | Page 27

accurate because they show what houses are actually selling for. Active comps
are just examples of what price people hope their homes will sell for and
therefore can be very misleading. But it’s important to realize what your
competition is.
What we try to do is put ourselves in the place of the potential buyer.
We ask ourselves, If they look at our listing, what other homes will they be
asking to see? If we can predict what homes they will be comparing a home to,
we can see how the home stacks up to the competition. This process helps us
have the conversation with the homeowner about finding the right price. If a
home is priced above what other comparable homes are listed for, the reason
should be extremely obvious to homebuyers or they will dismiss a home too
quickly, which leads to more time on the market and lower offers.
Another area we can compare that’s often underutilized is expired or
cancelled listings. Looking for homes in the immediate area that were listed
for sale within the past six months to a year but didn’t sell. In almost every
situation, there is usually a home that was listed in or near your neighborhood
that didn’t sell. So we’ll research that and try to understand why it didn’t sell—
was it because of the price, the presentation, or the visibility? All of those
things could have played a role. Those can be really good clues of what’s
happening in your immediate market, or at least help us understand what to
expect once we list your home.
What if there are no comps? Sometimes we can’t identify a single home
similar to your house that has sold recently. For example, a home may a great
view, but all of the homes surrounding it that sold in the last year don’t have
that view. We know a spectacular view can greatly increase the price of home,
but we don’t have the comps to calculate by how much. This happens all the
time when we have a unique house, and if we don’t have the comps to support
what we think it’s worth, it can be very difficult to figure out the right price for
your home.
With all listings—and unique ones especially—we need to go a little
bit on gut. With experience, we might see that our gut hunch about what a
home might sell for is often right on target. With training and by learning to
listen to that gut instinct, we’ve gained confidence when dealing with unique
homes.
Sometimes all we can do if there are no comps available is try to weigh
similar features on different houses. We can make certain adjustments to
them—find a house that is smaller or larger and estimate the perceived value
of that difference to homebuyers, calculate what a recent sale might have sold
for if it had a spectacular view, etc.—and try to equate what the house would
sell for based on the evidence we can gather. We might even get the opinion of
a number of agents to give us their feedback on valuation.
The Listing Triangle™
Page 26