In this week's installment, we're going to focus on 5 ways to use home price valuations to your advantage whether you're a home buyer, FSBO seller or real estate agent.
First off, you'll need to get access to good home valuation or pricing data.
At HomePocket, we provide something we call a home's "Comparability Index," or CI. In fact, we show this to you on every home listing when you register free and log in.
Check one out here: https://www.homepocket.com/property/632168/https://www.homepocket.com/property/632168/
So, what's the CI?
Simply put, the CI shows you how a given home's price stacks up to the average home price for other highly-similar homes currently on the market within 5 miles of the one you're looking at. We show you all those similar homes too.
What does "highly-similar" mean in our index? Well, we compare homes for similarity based on these core features:
- Number of beds and baths
- Square footage
- Lot size
- Age of home
- Exact location/situation
In fact, we'll soon be able to measure even more features such as distance from key conveniences, school ratings, air quality, crime, income and much more.
Try it out. Take a look at any property, scroll down the page to "Comparability Index" section and register free or login with your existing HomePocket web or app password.
Once you do, it looks like this:
If you mouse over the arrow, you get more info too.
So, how can you use this info? Here are 5 tips for Friday:
- Make your "best value" offer - Sellers know they're in competition for buyers' attention with other similar homes. Using our CI index, baseline price and the list of similar homes competing for your attention, buyers can make an offer justified with data. Research shows sellers are more likely to come down in price when buyers present them with data on other, competing homes rather than lose a sale.
- Stop wasting time - Home searches can be exhausting, costing you valuable time. If you use CI and see 10 attractive homes similar to the one you're looking at and that one is 20% or more over that baseline price? Chances are the buyer has unrealistic expectations and may be difficult to work with in a deal. That means you could lose out on another home that's for sale while wasting time with counter-offer after counter-offer with a seller who was unrealistic in the first place.
- Help your Realtor - When real estate agents do "comps," or comparables, they usually use MLS to show you what has sold near your home in the last year. This is valuable when it comes to mortgage time (i.e. what you'll get approved for) but doesn't usually help you get your best price from the start of the deal - where it matters the most. Our CI only uses homes that are on the market now, so you have bargaining power up front. The bigger benefit? You may get two chances to lower the home price when, later on, it doesn't appraise.
- See market trends - The average homes search takes about 4 months. That means you can watch home prices via the CI to see how things are going up or down and how the average price is changing for homes you're interested in. Just share each home you like to a Pinterest board for later viewing right from the home listing (at the top of the home images) and watch the prices change as inventory changes. This baseline price can be a good indicator of a market going up or down in an area - and that could affect your future equity (i.e. is the neighborhood appreciating or not?). Soon, we'll add a chart right on each home to show you rising or falling trends thru the year.
- Do "comps" and price valuations for better presentation to clients - Realtors, as mentioned above, typical comps are done via MLS sold listings. Now, you can add some data to your research when courting listing clients. Helping them see what the baseline price is for their address vs. other homes currently listed as well as a historical look at sold properties helps you offer better service. Wanna see how an unlisted, potential client home would stack up? Enter the address here: https://www.homepocket.com/home-valuation/. You can even have them login and do it, so they see what you're seeing.
Bonus Tip: Sellers, if you're thinking about selling as a FSBO or with a Realtor, you too can know what competition to expect! Just click, submit and see.
Happy buying and selling everyone! It's Friday! Have some fun out there and remember not to take life too seriously. If you do, humor and laughter are medicines, after all...
Realtors: Want the HomePocket Comparability Index and Home Valuation tool on your site to help your customers? Just ask.
About the Author
Jason Polancich is founder and lead architect of HomePocket, a data-driven, residential real estate marketing and listing network. Polancich also founded SurfWatch Labs, a cyber data analytics firm founded in 2013 that provides highly accurate, timely and actionable information to businesses regarding the cybercrime threats they face. Polancich is a serial entrepreneur focused on solving complex internet security and cyber-defense problems. Novii Design, a company he co-founded in 2005 with Rebekah Lewis-Polancich, was based on his contributions to cloud architectures, distributed computing, data analysis and systems integration. The company assisted the U.S. Intelligence Community and Department of Defense in building some of the largest data warehouse and analysis systems ever put into operation within the government and defense contracting sectors. Novii Design was sold to Six3 Systems in 2010.Follow on Twitter More Content by Jason Polancich