There were a total of 12 comparable sales in the area. Of those, four were foreclosures and three were brand new homes in neighborhood. Of the remaining five, one was not in the same neighborhood (it was closer to the schools). I ran figures on a several scenarios and got the following:
Type Avg $/SF Comp Price ADOMIt's also interesting to note that only three of the 12 properties had a sale price higher than $130,000, and only one was above $140,000. The ADOM for #1 is a bit skewed because one of the new houses sat on the market for 278 days! I'm figuring with a lower than average price, I could move this property in about 15-45 days.
---- -------- ---------- ----
1 $68.46 $133,638 51.5
2 $69.43 $135,528 29.1
3 $74.22 $144,879 27.0
4 $74.30 $145,027 28.5
5 $73.39 $143,251 20.7
6 $72.30 $141,129 44.0
1 - All Properties
2 - Same as #1, but drop 2 highest/lowest
3 - Private Sale Only in same neighborhood
4 - Same as #3, but drop highest/lowest
5 - Same as #3, but same floors, beds, and baths
6 - Same as #4, but same floors, beds, and baths
So, based on these comps, this house could probably retail for around $142,500. Since only one house has sold above $140,000 in the last six months in the area, I don't find that too comforting. Therefore, I am going to knock 5% off that, and make my initial listing price $135,000, which is roughly what I've been figuring ever since I learned I got the property.
4 comments:
Maybe you should try 139500 - I think most people see that and 139500 and 135000 dont look too much different - then when they make an offer of 136000 you can celebrate. Its the idea of break points - most people will see its "in the 130s" so no point in leaving money on the table. You may want to discuss that with the realtor or something though. Also, if you offer to carryback a 2nd that may help as well as offering to pay 8 points (8 percent) to the realtors instead of 6 (or whatever you had agreed to with the realtor - I know that had been an issue). Good luck
Very interesting, Ryan. I hadn't thought of that. I've heard about psychological effects in marketing prices, but simply never thought about it in this case. I'll run it by my RE agent and see what she thinks. Thanks for the tip!
I'm a fan of listing it high initially. You never know what someone will pay. Remember - you can always lower the price later, but you can never raise it. I would list it at $142K for 1 or 2 weeks, then lower it if you have to. Lowered prices are flagged in the MLS, so the price drop, if it happens, should attract some additional people.
Good idea, Shaun. In this particular area $142k may be out of reach, but it may be worth a shot. I can try that and then notch it down to $139,500 if I get no nibbles. I'd probably hang onto $139.5k for a little while longer until coming down further, though.
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