Finding the Prices of Homes Sold In My Neighborhood

Reader Question: “I plan to sell my house in the near future, and I’m trying to get an idea of what the local market is doing. Should I look at the prices of homes sold in my area recently to set my asking price? Is this a good strategy, or is there a better way to go?”

It’s a very good strategy, but there are several things you need to consider. The sale price of one house does not necessarily apply to all houses of the same size in the same area. But it’s a good place to start.

It sound like you are planning to sell you home by yourself, without using a real estate agent. I’m just guessing at this, based on the fact that you’re doing the pricing research for yourself.

Whether you sell on your own or with the help of an agent makes a big difference at this point. Here’s why:

If you use an agent, he or she will help you determine the asking price for your home. To do this, the agent will review prices of homes recently sold in your neighborhood — particularly homes that are similar to yours. These are known as “comps,” which is short for comparable homes. If the agent is experienced, he or she will also factor in whatever upgrades you’ve done to your home (new cabinets, a new deck, curb appeal, swimming pool, etc.).

If you are selling on your own, you’ll have to do this homework for yourself. But the source of your research will be the same. You will still use the prices of homes sold in your area as the starting point for your pricing strategy. The pricing data you look at should be (A) as recent as possible, (B) geographically close to you, and (C) for homes that are similar to yours.

Why Do You Need Home Prices In Your Area?

If you’re just doing some casual research out of mere curiosity, you can use a home value website to see what homes are selling for in your area. These websites use recent sales data that is publicly available, but they present it through an interactive map that’s usually easy (and sometimes even fun) to use. Here’s a list of five popular websites you can check out.

If you’re doing in-depth research because you actually plan to sell the home, then you should spring for a professional appraisal. When a licensed home appraiser visits the house to evaluate it, he can do something that a home value website cannot — he can account for upgrades, location, scenic views, condition of the property, etc. A website can only give you the prices for homes recently sold in your neighborhood, but it cannot tell you how that data applies to your property.

Again this process varies based on (A) whether you have an agent or plan to sell your own house, and (B) whether you’re doing casual research or actually preparing to sell. Whatever the case may be, the price of recent sales in your area is a good place to start.

Lastly, I’d like to point out the difference between the listing / list price and the actual sale price. Right now, there is a woman up the street from me who has her house on the market. I glanced at the flyer underneath the “for sale” sign recently, and I saw how much she is asking for the property. But she won’t get it. Her list price is probably $20,000 higher than what the house will actually sell for (sale price).

How do I know this? Because I often look at the prices of homes sold in my area, and I’ve seen the inside of her house. A real estate agent will tell you that this is the number-one mistake sellers mistake — pricing their homes too high.

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