Episode 69: What If There Are No Comps For My House?

Last week we started talking about Home Pricing 102, what do we do when it's not that easy to comp a house? It's really not that easy to find the price? So when we usually price a house, we look for, let's look at it objectively. Three bedrooms, two baths, this many square feet, this part of town, blah, blah, blah, that neighborhood, these amenities. It's usually not that hard to get a pretty solid range of what a house ought to sell for, but sometimes it is hard. And that's what Home Pricing 102 is all about. We're going to talk about three challenges that come up when trying to price a house and how we get past them.

So the three challenges are one, what if there are no comps? Two, what if you get the comps, but you find it's right on the bubble between like $450,000 on either side of it or $2 million or whatever the number is? It's right on the bubble. Do you go up, do you go down, and why? The third one is assessed value versus fair market value. And then saleability, what are those numbers? How do they matter and how do we take them into consideration when we're making our price? Today we're talking about what to do when there are no comparables. Your home is beyond compare. It is peerless. What do we do for a price? This is where home pricing and being a real estate agent, this is the art of it. There's a science to it and there's also an art. The art part here is you just, when there's nothing that really adds up with all the features that make your house yours, we have to go and start with our gut. What do we think it's worth? Let's talk about that, me and you. What do you think it's worth? I'll tell you what I think, just with no particular reason. Okay, great. Let's take that number or those numbers and let's go to the MLS. And we'll go in there and we will look at that and we'll go well, are people buying for that number? People who are spending $500,000, which is what we think your house is worth, who are these people? Where are they spending their money? What are they spending their money on? Okay, good. That will give us some of our information. It will either corroborate or sort of refute our numbers, but that's not the only place we're going to look. So we start looking at, let's just look at the gut number and what we think.

Then another angle to look at it to combine with that information that you got is what are the things that kind of make your house quirky or super unusual or just hard to comp? And it might be the location. The location might be incredibly amazing relative to the sticks of the house. Or maybe the location is the pits. There was one house I showed once, it wasn't one of our listings. For all intents and purposes, this should have been a million plus house. It was enormous. It had three-car garage, it was newer construction, had all of this beautiful land. It had pond frontage. So picturesque, absolutely beautiful. But the other side of the house was a highway. So the people who love that peacefulness of the pond are totally turned off by the highway. And the people are looking for a really large house, also the highway sometimes, a little bit of an issue. So they struggled a lot with the price, and we struggled too with trying to figure out well, if we did want to buy it, what would we offer? We would find that number the same way we'd find the number if we were listing that house. So there it is. If you've got a house that can't be comped, first, take your gut, look at the number that you think it should be and see what people are spending that money on in your area. Combine that information with what's the real quirk about your property. And like I said, if it's location, look for things that have houses at all price points that sold or are on the market in that same kind of location, that share that same quirk. Take a look at the market time. Take a look at their original price. Did they have to drop their price? How long did it take to sell? What price was it at when they got the offer? Take all that information, sort of mush it up, cook it up, a little bit of science, a little bit of art, and then you know what? You just have to go for it. The only way you're going to find out if you hit the right price is when you get that puppy on the market and see what the buyers who are out there today think it's worth. And that sometimes you also need to sort of hunker in. It sometimes takes a little while. If it's a really unique house, then you're looking for a really unique buyer. And you know what? They're kind of a needle and a haystack sometimes. So you've got to be patient.