Spencer Barron writes an excellent piece on comparative market analysis for individual homes. What makes it such a good piece is how he breaks down what should be considered in the estimate and why.
- New Sold Comps
- New Competition
- Changing Absorption rates
- Change in Days on Market before a sale
One of my favorite nuggets in the whole piece was the following quote:
What is most disturbing though is the vast majority of sellers already have a price in their head that they want. Of course, I’m usually willing to hear why the seller thinks his home is worth the pie-in-the-sky price. They are usually trying to compare their home to homes with extra bathrooms, a finished basement, or more square footage. Even worse, many work backwards from how much they want to walk away from the closing table with or what they owe to arrive at their number.
This is a must-read piece for real estate professionals and home buyers and sellers. Definitely check it out.
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